Finance International Expansion - Essay Example

Major differences exist in the economic, political, socio-cultural, technology, competitive and financial environments of different countries. These need to be taken into account in planning the overseas expansion. Expansion decision has to be made after proper consideration of all strategic and operational issues arising from within international milleu. Decisions need to be made concerning a wider range of both Strategic and Operational Issues. Key Strategic Issues that need to be addressed include assessing our company's readiness to internationalise which includes the suitability of your product or service for overseas markets and the extent of local adaptation required; choosing the most attractive foreign market(s) and the best entry strategy to adopt; international pricing, distribution and promotion strategies; organising and controlling our overseas activities.

Operational issues include export paperwork and documentation; legal and financial issues; finding and managing overseas partners and so on and are ultimately transferrable into financial and legal consultancy fees and travel expenses. Whether the company intend operating through agents/distributors or establish its own overseas sales subsidiary, the burden of control-related activities and costs is heavier than at home making it much more difficult to monitor and control overseas activities.

There are significant financial risks associated with doing business abroad, including the risk of higher indebtness, risk of not getting paid at all and currency fluctuations-related risks. Further, when going international we will need to be sensitive and empathetic to the local political and cultural environments of different countries. That entails higher management and consultancy costs and will unltimately produce to elevation of cross-cultural and political analysis to the level of decision making tool.

The competitive environment may be quite different from what we are used to at home. In whole, as a consequence of the above, international marketing is more costly and time consuming than domestic marketing and you will need to take a long-term view to achieve sustained profitability. The Barriers US Computer Systems companies, especially medium sized enterprises, face a number of barriers or obstacles when going international. These may include: Psychological Barriers including lack of international/global orientation; short-termism; product or technology rather than customer led 'mindset'; lack of commitment to international markets; exporting seen as 'too risky', 'not for us' or 'too much trouble'; the 'fear factor'.

Organisational Barriers including limited resources (financial and managerial); lack of knowledge of foreign markets; lack of international experience; lack of formal training in international marketing; problems in finding suitable overseas partners; ability to compete away from home.Operational Barriers relating to export documentation and paperwork; language problems; payment delays and risks etc.Product/Market Barriers in the sense of overseas market demand particularities, i.e. that product or service may not be suitable for overseas markets without major and costly adaptation; the product or service may not have a unique competitive advantage abroad; further, problems in