Question

Discuss the role of market size in motivating a company to pursue international expansion. Use statistics to illustrate your explanation.

Answer 1

There are many motivations for a company to pursue international expansion. The most obvious one is to increase the size of potential markets for the products and services of the firm. The world population approached 7.5 billion in early 2015, with the United States representing less than 5 percent. Many multinational firms are intensifying their efforts to market their products and services to countries such as India and China as the ranks of their middle class have increased over the past decade. The potential is great. An OECD study predicts that consumption by middle-class consumers in Asian markets will grow from 4.9 trillion USD in 2009 to over 30 trillion USD by 2020. At that point, Asia will make up 60 percent of global middle-class consumption, up from 20 percent in 2009