International business is not modern businesses and nations have conducted trade across national boundaries for centuries.
Lured by the prospects of vauntingly markets and/or sources of raw materials, businesses have traded with other parts of the world.
merely as we will see later global business and global industry is different.
Overseas trade and Ansoffs matrix
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view about international business in the context of Ansoffs matrix:
Entry into foreign markets represents market development.
Existing products be sold in new markets.
It is appealing because:
- market acumen is difficult in saturated markets.
- product development is costly.
- diversification is risky
Why enter overseas markets?
The reasons for entering overseas markets gage be categorised into push and pull factors:
Push factors
impregnation in interior(prenominal) markets
Economic difficulty in domestic markets
Near the end of the product life cycle at home
Excess capacity
Risk diversification
Pull factors
The attraction of overseas markets
append sales
Enjoy greater economies of scale
Extend the product life cycle
proceeding a competitive advantage
Personal ambition
Factors in the choice of which overseas market(s) to enter:
Size of the market (population, income)
Economic factors (state of the economy)
Cultural linguistic factors (e.g. preference for countries with similar cultural background)
Political stability (there is normally a preference for stable areas)
Technological factors (these affect strike and the ease of trading)
Constraints and difficulties in entering overseas markets:
Resources
Time
Market uncertainty
selling costs
Cultural differences
Linguistic differences
Trade barriers
Regulations and administrative procedures.
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