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International businesses look to locate foreign operations in countries which are stable. Outline and critically discuss the criteria by which they judge whether or not a country is stable - Essay Example

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The English and Dutch East Indian Companies were considered to be the pioneers in international trade and hence can be regarded as the first two multinational corporations in the world. Ever since their expansion outside their home territory, many other organizations have…
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International businesses look to locate foreign operations in countries which are stable. Outline and critically discuss the criteria by which they judge whether or not a country is stable

Even so, international expansion is a complicated matter and companies intending to enter a new country should take into consideration a lot factors. They include the economic and political environment, the individual strengths and weaknesses of the company, the opportunities and threats seen there, business and marketing strategies, and even the cultural factors that is peculiar to a particular region. This paper looks at these factors and will provide a detailed review with regard to its importance and relevance in international expansion strategies. It will establish a system by which companies can assess whether a market is attractive and stable. The focus will be on two countries namely China and Dubai, to provide specific applications of theory and literature on this area.
Specific factors influencing international target markets: The increase in globalization and free trade has now resulted in more and more companies looking to expand to overseas markets. Domestic competition is another factor the drives these companies to look for new markets. There are many factors (as mentioned above) that influence decision making by companies as to which market they should enter. “While only a few decades ago these external aspects were seen as centring on the home country of the business, the environmental horizon of business has widened to take in a host of international forces, which interact with national and local factors” (Morrison 2002, p 2). Morrison has provided a broad overview of the factors that influence international business as follows.
The organization is pictured at the core of the diagram which shows the various forces that act on it in a domestic and international environment. The additional forces that act on it in an international setting are the nation-state, region, and world ones. It can be seen that economic, socio/cultural, legal, technical and political forces are common to both domestic and international ... Read More
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