International Strategy Essay Example | Topics and Well Written Essays - 750 words

International Strategy - Essay spokespersonIt is also in a way the enquire of the hour as house servant based companies piece of tail no longer shield themselves from the effects of multinational corporations.International diversification carries with it significant advantages. Taking into greenback the obvious advantages in price of the increased market size and a higher return on enthronement, there are also other advantages that help the company take down its per unit be and hence increase profit margins. These accrue from taking advantage of economies of scale to drop down repair costs or per unit costs. This is further aided by the domestic incentives that the other countries may abide to aid their own economies which would give the expanding upstanding a comparative advantage.The development of world(prenominal) business take aim strategies however does depend on some factors. One of the chief is the amount of risk averseness of the management who may or may not be willing to take such a big measuring stick requiring possibly high capital expenditure. There is also the degree of environmental scanning performed by the firm and the degree of planning formality customd to guide the planning process. Finally a crucial particle in the decision to go international is the amount of munificence in the domestic industry environment. entrance into the international markets can be made by exporting directly to the market, making use of realiz satisfactory domestic incentives. ... company wants to retain greater control, acquisition of a company or formation of a whole owned subsidiary may be the best option in terms of allowing greater autonomy in decision making. Amazon is a company that enjoyed considerable growth since its inception and enjoys an international market of customers through its online store. The company now decided to go global with Amazons DRM-free MP3 digital music store. This is an authorized decision as it would expose the com pany to a whole new horizon of opportunities and risks (Amazon to initiate International Rollout of Amazon MP3 in 2008.). The motive for this expansion seems to be the traditional need to expand beyond the domestic market and tap in that reserve of international customers. However more than that, this seems like an essential choice for Amazon given that competitor multinational firms such as Apple with its I-pod and I-tunes store already have an international base and may keep creeping on Amazons customers. Apart from being the need of the hour, this expansion will allow the company to enjoy possibly higher return on investment given the rise in its customer base and increased sales could see quarterly network rising steadily. The company may also be able to enjoy economies of scale in terms of learning as handling a diverse customer base will allow it to fall into contact with and become adept at fulfilling unique customer requirements. This experience the company can use to br ing innovation to its operations in the domestic market and other areas of the business, something other competitors in the domestic market may not be able to enjoy. Since the main focus of sales will be online, the company has the benefit of not having to make an alliance or acquisition of any companies as it is able to