Question

Discuss at least three legitimate financial reasons why companies would choose to move into international operations.

Discuss each question thoroughly using essay format and/or mathematical theorem where you deem necessary. Answers may be written or typed; answers should not exceed ½ page in length.

Answer 1

• The most common reason that companies choose to move into international operations is that to expand their sales base.
• Growth of the revenue and product base in the international markets .
• Cheap labour availability of other international markets to that of existing market.
• Diversification of the market risk, where the sales at the existing market may reached the maturity stage.
• Financial loans availability may be high at different international markets when compared to that of the existing markets
• Companies also choose international expansion to gain a competitive edge over their opponents.
• Companies with multinational operations can also benefit from lucrative investment opportunities that may not exist in their home country.
• Suppliers following their Customers Internationally.