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Practical Application: Choosing an International Business Expansion Method

Instructor: Mary Matthiesen-Jones

Mary has worked around the world for over 30 years in international business, advertising, and market research. She has a Master's degree in International Management and has taught University undergraduate and graduate level courses .

Companies use a variety of approaches when they expand their businesses internationally. In this scenario, you will apply your understanding of these approaches and the factors to consider, while deciding on the most appropriate expansion method.

Building an International Business

In the lesson, International Business Expansion Methods, you learned about different approaches that companies use to expand into overseas markets. Let's look at a hypothetical scenario that can serve as a basis for illustrating how to choose the best approaches.

The Grand Teton Satchel Company is a family owned business based in Jackson Hole, Wyoming. They sell locally produced, high-quality leather handbags and briefcases bearing their distinctive Teton Mountain logo. Grand Teton Satchel Company's first store in Jackson Hole quickly established itself as a popular shopping destination for both locals and visitors from around the world. And it wasn't long before the company started opening outlets in major cities across the United States.

The owners are now exploring international opportunities to build their business and increase its profitability. They have four key objectives:

  1. Maintaining brand and store images
  2. Maintaining a high-quality product
  3. Decreasing manufacturing costs
  4. Increasing revenues

Application

Companies evaluate a variety of factors when exploring the options that will help them expand into the international market. Some of the questions they might ask include:

  • What level of financial risk am I prepared to take?
  • How much control do I want to have over international operations?
  • How much do I want to invest in an international operation?
  • How do I control my intellectual property rights?

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