Motives for Entering Foreign Markets

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As a consequence of this Spanish economic recession, “Duros Club” noticed a decrease on sales and profits during the first two years but going international was the solution.

Furthermore, other empirical studies over a number of years have pointed to a wide variety of reasons why companies initiate international involvement. These include the saturation of the domestic market, which leads firms either to seek other less competitive markets or to take on the competitor in its home markets; the emergence of new markets, particularly in the developing world; government incentives to export; tax incentives offered by foreign governments to establish manufacturing plants in their countries in order to create jobs; the availability of cheaper or more skilled labor; and an attempt to minimize the risks of a recession in the home country and spread risk (A.Chen & M.Hicks, 2000).

Moreover, economies of scale are one the most important motives to go international but this involves more culture knowledge, as I said at the start of the paper is really important to know others culture to go international. Exporting is an excellent way to expand your business with products that are more widely accepted around the world. In many manufacturing industries, for example, internationalization can help companies achieve greater scales of economy, especially for companies from smaller domestic markets. In other cases, a company may seek to exploit a unique and differentiating advantage (intellectual property), such as a brand, service model, or patented product. The emphasis should be on “more of the same,” with relatively little adjustment to local markets, which would undermine scale economies (Richard P. Biggs, 2013).

To conclude, entering the international market is going to increase profits and sales, expand our business by entering in new markets, accessing faster-growing markets to obtain greater profits while generating greater revenue, also lowering the cost of the goods sold. That being said going international is going to be a great personal experience to grow as a person, what is going to be shown when back in the business and personal relationships because you are going to be a more cultured person that didn't stay in the countries boundaries but went international to improve in all aspects of life.

References:

Anne Chen and Malt Hicks, "Going Glob Avoid Culture Clashes," PC Week, April 3, 2000, pp. 68-69. Don McCubbrey. “Reasons for entering international markets.” Business Fundamentals Boundless, 20 Sep, 2016.

Maid Gutierrez Martinez, “Why to Internationalize: 5 Reasons to enter the international marketplace”, Carlos III University. March 11, 2015.

Richard P. Biggs, CEO of Atlantric LLC, Portland, OR, USA. “10 Reasons to go International”, May 5, 2013. Web page: www.atlantric.com