Motives for Entering Foreign Markets

Motives for Entering Foreign Markets

Research Paper

To: Dr. Scott Glenn

International Business

Fernando Sanchez

Motives for Entering Foreign Markets

        International business comprises all commercial transactions that take place between two or more regions, countries and nations beyond their political boundaries. I love business and my original country is Spain so for me International Business is a key to success, International relationships are really important nowadays if you are trying to grow as a business or even as a person, developing cultural knowledge so that you know how to represent your business in another country where you have to deal with foreign persons that may not have your same attitudes or beliefs.

        If you really want to improve your business entering foreign markets should be one of your first choices, but why should we enter to this markets that are not in our political boundaries? There are multiple reasons for this and I am going to talk about all of this advantages and how this foreign markets can help us improve our business.

        That being said, as we learned in class the main reason to enter foreign markets is because that is going to help us increase profits and sales of our business.  Talking about increasing sales, if your business is succeeding in the U.S., expanding globally will likely improve overall revenue. Richard P. Biggs, CEO of Atlantric LLC, says that approximately 96% of the world’s population lives outside of the U.S. and 90% of the world’s population does not speak English, this suggests customers are global and that if your company looks beyond the shores of the domestic market, you have some real upside potential. If your company has a unique product or technological advantage not available to international competitors then this advantage should result in major business success abroad. For example, if you run a software company and add a French and German language version, you are extending your total market by nearly 200 million (10 Reasons to go International, 2013).

        I have experienced this, I have my own brand in Spain called “Duros Club”, when I came to Delaware I talked with two of my teammates from Colombia and Mexico, nowadays we are selling the product overseas and our sales are just growing at the same time as our profits.

        Sales are directly connected with profits, as we said entering foreign markets are going to make our business increase sales, if our product is increasing the number of sales that is going to affect direct and positively our profits. Also there is a specific fact about profits, a product may vary its price from one country to another inclusively changing a product from being a normal product to become a premium one, higher rated product means higher profits.

        In addition, short and long term security are also main motives to enter the foreign market. Your business will be less vulnerable to periodic fluctuations and downturns in the Spanish or European economy and marketplace. Generally speaking, the Eurozone is a large, mature market with intense competition from domestic and foreign competitors. During these years of deep economic recession, exports were the solution for many Spanish companies. Thanks to these sales to foreign markets many companies could keep and also improve their production capacity, employment and financial structure (Madi, 2015).