Risks Of International Expansion To Explore New Market In Different Countries

Submitted By lordlachlan
Words: 1556
Pages: 7

It is very common for businesses and franchises to want to expand overseas to explore new market in different countries. Although this sounds good and beneficial, it comes with many difficulties and risks. It is guaranteed that in an organisations lifetime they will come across the decision to expand their business overseas to either make more money or just to expand business. All businesses that seek to do this will come across risks that they are going to have to take for it to work and be a benefit to them. It all depends on what type of business it is that seeks expansion.
As stated earlier there are many risks that involve international expansion. A common problem that small businesses run into when they dabble with setting up international relationships, for example, is that they sometimes don’t really know who they’re dealing with. No matter where you go to, unless it an English speaking country, the language barrier is always going to be a problem. Even if you are able to access a translator to help it will still be hard to fully connect with other countries in terms of business. Another risk is not being familiar or accustom with their culture practises and etiquette. A big thing with expanding overseas is knowing where you are going and what they are like in that country because if you don’t you could run into trouble because some of the thing that are normal to people in their home countries can be an offence in other countries.one thing that ties in with that risk is that some countries are a lot stricter with their laws compared to other countries so that is a big thing to think about if wanting to expand overseas. A very large factor that you have to think about is how time consuming it actually is to move a whole business overseas and get them fully working and all in order for the business to commence in that country. It also isn’t very easy due to having to build overseas when you aren’t there which means that sometimes you would have to travel to that country to see that it is all going to plan and not being messed up. Lastly and the most important risk that you would have to face is finding a partner or sponsor overseas that you can actually trust to help with starting up your organisations overseas. Especially in a different country it is very easy to trust someone and then for them to go behind your back and ruin all your plans. You have to be careful with who you choose to start up a business with overseas.
Even though there are many important risks that are to do with expanding overseas there are also many benefits that could happen with exploring overseas if you are willing to take those risks. The same benefit is the possibility of you entering into an untapped market which can and will most likely open up many doors for your business. Being an untapped market source your business will strive greatly. Whatever side you teeter toward, remember that going global doesn’t have to be a “right now” sort of thing. It’s always a possibility that you should consider, simply because you’re a business owner. If you are considering such an expansion, then there is a lot of work to be done before you begin. Be sure to check back the rest of the week as we continue discussing expanding your business overseas.
The two countries chosen were Argentina and he United States. For both countries there are a few things that you have to consider, such as the economic risk, the political risk and the financial system risk.
Economic risk
Argentina, Latin America's No. 3 economy, grew at one of the region's fastest rates in 2010, although some economists say widely questioned official data overstates growth.
With the exception of 0.9 percent growth in 2009, Argentina has posted strong annual growth since Nestor Kirchner, Fernandez's late husband and predecessor as president, took office in 2003 following the 2001-2002 economic crisis.
An agricultural powerhouse, Argentina is the world's top supplier of