International Expansion: Factors to Consider

International
Expansion: Factors to
Consider.

Introduction
 Careful analysis is required on the internal capabilities and external market
conditions influencing internationalization decisions
 Legal, social and cultural environment in the target country
 Economic environment of the target country including GDP, inflation,
interest rates and unemployment rates
 Economies of scale and efficiency
 Market structure in the domestic and global scene
 Risks involved in the external markets and
 The costs the firm is likely to face

Legal, social and cultural factors
 Consider the regulations of investment treaties, tax laws and
employment laws
 Also, the multilateral regulations between the local and target
country are crucial.
 The cultural distance and psychic distance

Economic factors
 The GDP per capita of the target countries
 Consider rates of inflation of target countries to make production
and decision flexibility possible in various target countries.
 Unemployment rates affects the demand in the target countries
 Interest rates affect the strength currency and foreign investment
decisions of the firm.