International-Business-Dr-R-Chandran-E-book

5
International Business- Dr. R. Chandran
REASONS TO ENTER INTERNATIONAL
BUSINESS
All organizations, irrespective of their size, are keen to enter in to
international business. Established companies are expanding their business.
Many countries encourage trade, and removal of strangulating trade barriers.
It motivates companies to aggressively multiply their targets. The
governments of various countries are also determined to make their
economy grow through international business that has therefore become a
inevitable part of their economic policy. The objective behind international
business can be looked at:
1. From an individual company’s angle.
2. From the government angle.
From an individual company’s angle
1. Managing the product life cycle:
All companies have products, which pass through different stages of
their life cycles. After the product reaches the last stage of the life
cycle called the declining stage in one country, it is important for the
company to identify other countries where the whole cycle process
could be encashed. For example, Enfield India reached maturity and
declining stage in India for the 350 cc motorcycle. The company
entered Kenya, West Indies, Mauritius and other destinations where
the heavy engine two-wheeler became popular. The Suzuki 800 cc
vehicle reached the last stage of its life cycle in Japan and entered
India in the early 1980’s, where it is still doing good business today.
HP laptops are moving all the developing countries the moment they
reached maturity in the U.S. market.
2. Geographic expansion as a growth strategy:
Even if companies expand their business at home, they may still look
overseas for new markets and better prospects. For example, Arvind
mills expanded their business by either setting up units or opening
Only for Private Circulation