1-2 Assignment: Benefits of Global Expansion PDF

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Assignment on benefits of global expansion. List of: types of business environments, example organizations, benefits of expansion, and ethical considersations....

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Vanessa Stokes Global Dimensions in Business September 10, 2021

Benefits of Global Expansion In today’s business, it is common to utilize international resources to expand one’s business. One can even argue that it is essential for domestic businesses to expand into international markets so that it can grow and branch out to the next level. In this assignment, I will define both domestic and international business and the differences between the two. I will be explaining key benefits of international and global expansion for domestic business. Finally, I will discuss the role of ethics in making business decisions regarding expansions to new markets.

Domestic vs. International Business Domestic businesses refer to the business where economic transactions are conducted within the boundaries of one’s country. Domestic businesses are not taxed the same as a foreign corporation and may need to pay for fees and/or duties on the products being imported. With domestic trade, both the seller and buyer live in the same country. This means that their trade agreement is strictly based on the laws and practices of their specific country. Some advantages of conducting business domestically are lower transportation cost, low transaction cost and less time between the production and sale of goods. International business refers to the business where economic transactions are conducted beyond their domestic borders. This includes commercial activities such as investments, sales,

and logistics where multiple countries are involved. International businesses prefer having a larger customer base from other countries, and more options on where their resources come from. Possible disadvantages of entering international markets are tariffs, quotas, politics, and socio-cultural differences. There are many differences between domestic and international businesses. Quality of services and product is usually lower in domestic business while quality standards in international business are much higher. Domestic businesses only utilize currency from the country they are operating in while international businesses utilize a variety of currencies. Domestic businesses usually work with the same customers while international businesses serve different customers with different cultures. Domestic businesses are much easier to manage than international business.

Example Organizations An example of a domestic business is Foodtown Supermarket. Foodtown was founded in 1955. There are currently 66 Foodtown stores in New Jersey, New York, Connecticut and eastern Pennsylvania. Their current products are bakery, dairy, deli, frozen foods, meats, pharmacy, grocery, snacks and certain stores carry liquor. An example of an international business is Apple Inc. Apple Inc. was founded by Steve Jobs, Steve Wozniak and Ronald Wayne in the 1970s. Apple designs, develops and sells electronics, streaming and online services worldwide. Its first international location was opened in Tokyo, Japan in 2003. They not only sell products internationally but they currently have supply chains in 43 countries that ship supplies to China for final product and assembly.

Benefits of Expansion Domestic businesses usually choose to go international because they want to grow and expand operations. Some benefits of entering international markets included generating more revenue, entry new markets, diversifying company markets, learning new cultures among other things. Depending on the success of a domestic business, a government will sometimes encourage companies to enter their country’s market in order to build their economies. International expansion allows companies to spread the risk of slowing demand across other countries. For example, if sales in one market never gain, it is possible for you to pick up the slack in another country. Companies often lose advantage in specific fields as competitors come into the picture. However, in international markets, they have the possibility of trailblazing in a new market and build revenue,

Ethical Considerations When making business decisions regarding expansion to new market, it is important to understand the ethics it entails. Somethings that need to be understood are differences in employment laws, challenges of corruption, and human rights laws. When doing business in international locations, conditions are often inferior to those of the United States. It is important to research the local economy and guarantee living wages and establish fair working hours. Finally, when a company makes payments to secure business in another country that they could not otherwise obtain, it is technically illegal. If a company finds that large sums are routinely required in order to do business in said country, it is best that that company make the decision to pull out.

Reference Page Define Domestic Business: Everything You Need to Know. upcounsel.com. (n.d.). Retrieved September 10, 2021, from https://www.upcounsel.com/define-domestic-business. Ethical Considerations: Global Expansion. bartleby.com. (n.d.). Retrieved September 10, 2021, from https://www.bartleby.com/essay/ethical-considerations-global-expansionP3ZDSCUVK6Z3W....