EXPANDING GLOBALLY: ADVANTAGES AND DISADVANTAGES
Advantages and disadvantages of expanding globally are clarified in order to make an analytic, reasonable, and correct decision. Initially, the advantages of a globally expansion strategy are explained below:
Broadening horizon: It is necessary to empower progressively for retaining the current performance and success. The companies in multiple countries are strengthened by the different cultures and have a natural advantage of differences which makes them stronger (Gaille, 2015). Globally expansion can empower national companies and foster their global mind-set.
New regional markets: National companies can obtain a nation-wide success with a good performance. A well-planned expansion strategy will allow them to access new and global markets (Macintosh, 2018) in order to increase their products life circle and to have a different customer base in new geographies.
Visibility and recognition: Globally expansion will increase the visibility and recognition of a brand and will make it a global trademark (Gaille, 2015). In order to pursue with a sustainable high performance, nation-wide companies should have a remarkable brand-recognition not only in the USA, but also in the other countries of the world.
In addition to the advantages, there are several disadvantages of globally expansion:
Different time zones: There can be several hours difference between the local time and globally operating locations. Doing business in different time zones can be difficult but the company should operate by having 24-hour management capabilities, customer service (Duff, 2019), and international business coordination (Gaille, 2015).
Unknown markets: Companies should know the target markets and none of the potential markets are welcome to them. A globally expansion strategy can be built with an extensive research on the target markets and expanding decision should be based on these market investigations.
International law, legal environment, and work permission: Setting up branches and assigning staff abroad can cause to face immigration rules for long-term assigned employees (Macintosh, 2018). For not to make a legal mistake, companies should work with experts or attorneys for international trade (Duff, 2019). As a known reality, there are many legal issues of globally expansion decision from international law to work permit of a new country.
Massive human resources and finances for globally expansion: Globally expansion decision requires human resources and financial capacity. Managers should be highly motivated to work abroad, and companies should plan to recruit staffs for the new country and provide finance to invest abroad.
References
Duff, V. (2018). The Pros & Cons of Going Global with a Business, Chron, https://smallbusiness.chron.com/pros-cons-going-global-business-40458.html
Gaille, B. (2015). 12 Pros and Cons of Expanding a Business Internationally, BrandonGaille, https://brandongaille.com/12-pros-and-cons-of-expanding-a-business-internationally/
Macintosh, D. (2018). Pros and Cons of International Expansion, WorldWideERC, https://www.worldwideerc.org/news/pros-and-cons-of-international-expansion/
