Corporate Expansion Internationally
In an article by Pete Evans of CBC News titled “International expansion is smart but risky”, the advantages and disadvantages of expanding a business internationally are outlined. The author, like most large corporation owners, is an advocate of doing business internationally, as it is a great way to increase revenue by lowering costs of production, and expanding sales into a foreign market, however, he cautions businesses to be very careful in doing so.
There have been many cases of international fraud in recent years when companies have “jumped” into making foreign deals without researching, or finding out about the company, or market they’re dealing with. Many businesses fall into the trap of thinking international expansion will always be profitable with little work required. Mr. Evans goes on to say that “whats written in a foreign language may not the be the same as whats written in your language. And the foreign language always wins in a legal battle overseas.” He urges companies to be very careful that nothing is lost in translation, and that goals and policies are agreed upon by both sides.
Mr. Evans urges companies to attempt to do business internationally by using the internet first if possible. This way they can get a feel for the foreign market, and the customers they’ll have, without having to deal with the costs and extra regulations of working and living there. Companies have to think long term about their expansion into a foreign market, and not get trapped into thinking about short term profit even if they’ve had a positive international experience before.
I completely agree with Mr.Evans, as there have been many articles regarding companies that have expanded internationally and end up being at a loss, or having a different outcome then expected. International business is a great way to expand and promote one’s product, or idea, but the company, or individual must be wary in how they make this transition.