After clarifying the corporate mission and objectives, the first major step in weighing international strategic options is the environmental assessment This assessment includg environmental scanning and continuous monitoring to keep abreast of variables around the world that are pertinent to the fir.... readmore
Governments in countries such as Poland seeking new infusions of capital, technology, and know-how willingly provide incentives: tax exemptions, tax holidays, subsidies, loans, and the use of property16 Because they both decrease risk and increase profits, these incentives are attractive to foreign .... readmore
Economies of scale in production are achieved when higher levels of output spread fixed costs over more units, thus lowering the per-unit cost. Gerrit Jeelof,
of Holland's Philips Group, contends that 'only with a global market can a company afford the large development costs necessary to kee.... readmore
Typically, the strategic formulation process is necessary both at the headquarters of the corporation and at each of the subsidiaries. One study reported, for example, that 70 percent of 56 American MNC subsidiaries in Latin America and the Far East operated on planning cycles of five or more years-.... readmore
Governments in countries such as Poland seeking new infusions of capital, technology, and know-how willingly provide incentives: tax exemptions, tax holidays, subsidies, loans, and the use of property16 Because they both decrease risk and increase profits, these incentives are attractive to foreign .... readmore
Careful, long-term strategic planning encourages firms to go international for proactive reasons. One pressing reason for many large firms to expand overseas is to seek economies of scale - that is, to achieve world-scale volume to make the fullest use of modern capital-intensive manufacturing equip.... readmore
Operations in foreign countries frequently start as a response to customer demands or as a solution to logistical problems. Certain foreign customers, for example, may demand that their supplying company operate in their local region so that they have better control over their supplies, forcing the .... readmore
Similarly, regulations and restrictions by a firm's home government may become so expensive that companies will seek out less restrictive foreign operating environments. Avoiding such regulations prompted U.S. pharmaceutical maker SmithKline and Britain's Beecham to merge. Both thereby guaranteed th.... readmore
Restrictive trade barriers are another reactive reason why companies often switch from exporting to overseas manufacturing. Barriers such as tariffs, quotas, buy- local policies, and other restrictive trade practices can make exports to foreign markets too expensive and too impractical to be competi.... readmore
One of the most common reactive reasons that prompt a company to go overseas is global competition. If left unchallenged, competitors who already have overseas operations or investments may get so entrenched in foreign markets that it becomes difficult for other companies to enter at a later time. I.... readmore