Motivating factors for global expansion

Introduction

In the current financial market, every company is trying new business ventures in an attempt to gain a new customer base for their products. Therefore, it has become necessary for a company to diversify and capture new markets. Among other methods, one of the most successful and sure-shot ways is an international expansion (Alden & Nariswari (2017). As of 2016, it has been reported that almost 87 percent of the leading companies in the USA think that global expansion is necessary for long term survival of the company. Global development has also ensured the continuation and expansion of many companies in recent times and has also been a reason of loss for many companies.

Why expansion?

Global expansion has many benefits, which are mostly driven by the need for brand awareness. Making their brand-aware is a crucial step in business expansion for a company. This helps the company in many ways, and in turn, helps the company to try new ventures to capture new markets in the unknown territory. Expanding business beyond the original borders of the industry enables a company to hire new talents to the marketing and management, preferably with the knowledge of the market to which the company is expanding their business (Xu & Croft (2017).The newly recruited staff bring new ideas to the table, which helps the company in their research and development process, automatically incorporating them in the process of developing new product ideas.

To successfully expand into foreign soil, a company needs to add new features to their existing products being available, so that they become more functional to the new customer base (Keegan (2017). Service industries need to modify their services according to the need of the local people so that they can avail of their services and get familiar with it. Also, a company may launch a new product after diversification, keeping in mind their newly created customer base, and overall appeal of the products, which may further result in increasing the popularity of their brand name.

As discussed earlier, global expansion enables a company to grow towards becoming bigger both in terms of customer base and business. An increase in brand value of the company due to this expansion results in foreign investors expressing interest in investing their money in the company. Furthermore, it increases the scope of collaborations with international companies, who can pool their resources and lend their minds as well as the workforce to work towards a common goal, which could be beneficial for both the parties involved.

Conclusion:

In some countries, the government might come forward to help the company in expanding business on their soil and might provide additional perks and finances for the same purpose. This is usually done to introduce the products and services that the company is manufacturing to their population as well as to provide job opportunities to the unemployed and aspiring youths of that country. For example, the government of a technologically backward country might give land and finances to a foreign software company planning to open branches on their soil, to give their population a technological boost.