week 7 discussion please respond B u s i n e s s F i n a n c e
Week 7 Discussion
Please respond to the following:
- What incentives influence firms to use international strategies? What are the three basic benefits firms can gain by successfully implementing an international strategy? Why?
- Determine why, given the advantages of international diversification, some firms choose not to expand internationally. Provide specific examples to support your response.
- As firms attempt to internationalize, they may be tempted to locate their facilities where business regulation laws are lax. Discuss the advantages and potential risks of such an approach, using specific examples to support your response.
- Be sure to respond to at least one of your classmates’ posts.
Below is a peer’s discussion post in which I’ll have to provide a response too.
RE: Week 7 Discussion
Several basic incentives influence a firm to use the international strategies, and they include economics of scale with additional incentives, broader market accessibility and finally lower expenses such as energy and labor. Other incentives that will influence the forms to use the international strategies include the opportunity to use the modern technology, opportunity to corporate with other global organization, opportunity to extend the life cycle of the goods and the services. However, the other reason that will propagate the organization to use the international strategy is the easy access to the raw materials and resources to attain high profits and add reach more potential customers. However, the main aim of the incentives is that it will aid in the accessing of high revenues and also gain high profits.
The reason why some firms decide not to opt for expanding the business internationally is because of several reasons, and they include lack of the resources that will aid in the expanding the business internationally, lack of the finance that will facilitate the expanding of the business. The international laws is also another reason that can lead firms from not opting for the international strategy. Cultural and language barriers is also another reason that will also discourage the business from expanding internationally.
The firms would prefer to work where business laws are lax because of the competitive advantage the business will attain. Some of the reasons include the increased profits as a result of the prices that can be set by the organization, access to cheaper raw materials and resources.