Question

Explain in your own words why companies with international scope might decide to reinvest, scale back, or divest local operations?

Answer 1

Companies might decide to reinvest because international scope companies tries to reinvest profits to developing nations , where the pay back period is long but has a good outcome in the future . So, for market capture and to make more profits , companies tend to re-invest in those regions.

Companies scale back operations beacuse when that expection of profit from those regions takes a longer duration , which is tend to be more than what was expected. Ans companies again reinvest in these markets , when there is a rapid growth .

Companies divest because companies tend to invest in those markets where the profit and outcome is better from other markets . So companies divest operations from local markets to boost investment and operations to the emerging market , so companies can maximize their profits.

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