There are a number of reasons companies may shy away from international diversification such as economic or political risks. It also allows companies to reduce on costs by moving manufacturing operations to countries where laws are looser, labor is cheaper, resources are more readily available, and by outsourcing operations. Companies can expand their footprint by reaching new customers in different countries, which in turn generates more revenues. The three basic benefits firms can gain by successfully implementing an international strategy are increased market size, economies of scale and learning, and location advantages. Gain access to consumers in emerging markets Opportunities to better use rapidly developing technologies Opportunities to integrate operations on a global scale

The text lists multiple incentives for firms to use international strategies that include: Discuss the advantages and potential risks of such an approach, using specific examples to support your response.īe sure to respond to at least one other student. Provide specific examples to support your response.Īs firms attempt to internationalize, they may be tempted to locate their facilities where business regulation laws are lax. What incentives influence firms to use international strategies? What are the three basic benefits firms can gain by successfully implementing an international strategy? Why?ĭetermine why, given the advantages of international diversification, some firms choose not to expand internationally.

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