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Saturday, July 12, 2014

MOTIVATION FACTORS OR REASONS FOR ENTERING IN INTERNATIONAL MARKET

There are numerous reasons why to proceed internationally, however the objective of every company for going international is to expend its business, searching new market and expend its customer base. There are several reasons listing below for entering in international market:

Growth and Profitability
- A lot of companies turn to global markets for growth. Introducing new products internationally can broaden their customer base, sales and revenue.

Economics of Scale - Expanding size and scope of markets help to achieve economies of scale. International approaches give economies of scale while sharing of costs and risks between markets. Economies of scale occur when the unit cost of a product declines as production volume increases.

Risk Diversification - Several companies move worldwide so that they can diversify. Selling products in numerous countries reduces the company's exposure to economic as well as political instability within the country.

Uniqueness of Product or Services - The product with distinctive attributes isn’t likely to meet competition in the abroad markets and enjoy massive options throughout worldwide marketplaces.

Spreading R& D costs - Through spreading the marketplace, a firm rapidly recovers the cost incurred in R&D. it is especially true with regard to products including higher cost associated with R&D. As result of the large marketplace and also due to larger coverage of the right market segments in international markets, it facilitates speedy recovery of such costs.

Resources and Ideas - Due to unavailability of resources in domestic country or at better competitive rate companies turn into global market. Also companies proceed internationally to collect the different ideas in the different lifestyle of various countries as well as to broaden their workforce.

Employees - All organization wants skilled and well trained employees, as result company goes to worldwide marketplace to find alternate source of the labor at lower cost.

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