International Business Expansion

Name

Institution

In entrepreneurship building and sustaining of a local consume base is normally the first step of the business. Once the entrepreneur attains this goal, he or she starts to think of expanding the business internationally. Becoming an international company is a great deal but not all companies that decide to go globally achieve their goal or objectives. To successfully turn your company from local to international, an entrepreneur need to consider new factors that could not necessarily impact a domestic corporation. Creating an international presence is not simple as many will think. There are numerous factors concerning marketing and selling products in another country. The company will have to take time and carry out a research for potential foreign markets. The company will have to get first hand concept of how the business will survive in foreign market. Even though the business environment in the foreign environment may not be identical with that of your home country you need to familiarize yourself through business discussions.

The entrepreneur should take into consideration culture, trade barriers, currency and proximity – the fewer variations between your nation and the one to invest or export, the easier it is to do business in that country. Before one decides to expand the business, you need to ensure that the available resource s and staff can handle the new influx of labor accompanying such growth. The company must have a team to just focus on international development and be ready to encounter the challenges and support the expansion.

The following are the challenges faced in expanding the business internationally. This includes; language and culture barriers- selling to consumers or operating with suppliers who do not speak your language may be an obstacle for the company owner. Also, cultural norms may affect success of business expansion. Taxation and compliance issues can also impact the expansion of business internationally. Domestic competition can affect foreign products where an individual would prefer to buy their own made products as compared to those imported of similar kind. The involvement in the international business can help one to develop his international relation skills and a wide variation of business growth.

Q2

Automobile industry has greatly developed widely in the world with various model of automobile industry being invented each day. When the company markets itself internationally will have to face the following market competition.

Monopolistic competition the company may encounter many suppliers of automobile in the market even though the barriers to entry are few. It can force the firm to try to attain competitive advantages through differentiating its products from other similar automobile products. This could be achieved through making superior automobile and doing much advertisement. For example, the automobile company can convince the consumers how the vehicle consumes less petrol in comparison to another automobile.

In an oligopoly market the firm faces competition from few suppliers. The company may take into account the changing of price in regard to other firms. This is because in the auto manufacturers fixed cost is usually very high hence limiting entry of other firms in the market.

In a pure monopoly market the firm will have a competitive advantage as it will be the main supplier of and also the determiner of value to the products supplied. The company will face little competition due to high initial costs to venture into the business. For example, the supply of high end vehicle of luxury will put the company in a monopolistic state. If the company were to be the major supplier in the United States, then it could have a high end competitive advantage due to its monopolistic state.