Pros and Cons of Going International - 1995 Words

Pros and cons of going international When thinking about internationalization, a lot of people instantly associate it with multinational companies. It cannot be said that they are wrong; however, internationalization is a far more complex phenomena as it does not only consist of companies setting their headquarters outside the borderlines of the countries of origin. If an entity simply decides to import or export commodities or services, their action can also be described as ‘going international’; producing effects both domestically and internationally. In recent years, the number of companies that chose to get involved in international business operations and transactions increased substantially to the point where becoming visible in†¦show more content†¦There are many companies that derive their sales from outside their home country. Very large companies such as BASF of Germany, Electrolux of Sweden, Gillette and Coca-Cola of the United States, Michelin of France, Philips of the Netherlands, Sony of Japan, Nestle of Switzerland make over half of their sales through international operations. Diversifying the sources of sales and supplies. Most of the times, in order to avoid the fluctuations in sales and profit, companies look for foreign markets; taking advantage of the business cycle differences among countries. For instance, if they incur price fluctuations or shortages in one country, they can obtain supplies of the same product and component in other. Other factors that contribute to the positive trend regarding internationalization are represented by the following: the need to increase global competition along with the quick exposure to new products, the development and expansion of technology, the liberalization of cross-border movements and the development of supporting services that ease international business (examples of supporting systems include the airmail and international payment systems). Internationalization does come with costs, though, from the immediate monetary costs incurred related to extending the operations to the risk of failure brought by the difficulty in running such operations. These costs depend on theShow MoreRelatedAmerican Eagle : Saturated The United States Market904 Words   |  4 PagesRussia, Saudi Arabia, United Arab Emirates, Thailand United Kingdom (International Stores, AE). The reason I chose this company is because it is actually a company that I used to shop at when I was in high school. 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