Internationalization challenges faced by multinational companies

Managing Across Borders

Running Head: Report
Contents
Executive summary.......................................................................................................... 2
Introduction.................................................................................................................... 3
Main body..................................................................................................................... 5
Conclusion................................................................................................................... 12
References................................................................................................................... 13
Appendix 1.................................................................................................................. 16
Appendix 2:................................................................................................................. 17
Appendix 3:................................................................................................................. 18
Appendix 4.................................................................................................................. 19
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Running Head: Report
Executive summary
The report is written with intent to analyze the challenges faced by the companies while
expanding the business across the borders. The whole essay revolves round the process of
internationalization. The company chosen for this report is Sainsbury which is the largest retail
supermarket that expanding its business in Asia. Sainsbury faced many challenges during the
expansion of the business. In this essay, both positive as well as negative impact of the
internationalization or business expansion has been illustrated with the help of the selected
company. The positive points that have been observed in this essay are related to the business
growth for long term, increasing the customer base, and increase the profits for the company. It
is a great opportunity for the Sainsbury Company offer its services and products to the large
number of customers and attracts them to increase the profits of the company. On the other hand,
the negative points are that company needs a huge amount of money in order to establish the
business in the new market. The risk of political instability and the terrorism is high in the
business expansion in the developing countries like Pakistan, Iran, India and Iraq. This essay
also emphasizes on the role of the globalization in the expansion of the business. The reason
behind the internationalization or business expansion is that every company wants to stay
competitive in this technological world and competition is the biggest threat while establishing a
business in a new market.
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Running Head: Report
Introduction
Internationalization is the process of promoting brand and the products in the multiple countries
in such a way that it meets the needs of the customers as well as easily adopted by the countries.
The companies are taking steps to increase its business sales and customer base by tapping the
global or international markets. Because of the globalization, there are many opportunities
available for the countries to expand the business across the borders and contributes towards the
economic development. There are many companies who are going global for gaining the profits
as well as the competitive position. The company that chosen for this report is Sainsbury and it
expanded its business in Hong Kong Country of the Asian Market. There are many challenges
and risks are involved while establishing the business in the market of Asia such as political,
legal, social and technological risks (Citigroup, 2008).
Working in a global environment has various merits and demerits. Deciding on whether to invest
money on the expansion is the common decision. Business expansion has positive as well as
negative impact on the performance and productivity of the business. The positive points that
have been observed in this essay are related to the business growth for long term, increasing the
customer base, and increase the profits for the company. The decision making is also playing a
vital role in deciding whether to invest money in on the business expansion or not. It is a great
opportunity for the Sainsbury Company offer its services and products to the large number of
customers and attracts them to increase the profits of the company. One more positive point of
the business expansion is that by doing this, companies can also spread the risks. On the other
hand, the negative points are that company needs a huge amount of money in order to establish
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