Factors that may influence a firm s decision to go abroad

The primary factors that influence a company's capital-structure decision are: Business Risk Excluding debt, business risk is the basic risk of the company's operations. The greater the business risk, the lower the optimal debt ratio. As an example, let's compare a utility company with a retail apparel company.

Factors that may influence a firm s decision to go abroad

Borders seem to be more symbolic now than they are barriers to trade like they were years ago. As this whole new frontier opened up, businesses realized there was a brand new opportunity out there for them to generate even more income. All this has led to the birth and growth of international marketing.

What Is International Marketing? Some would call it the coordination of marketing strategies by a company that are necessary to sell goods or services in a foreign marketplace.

A very good reason why companies need to consider international marketing is to get a piece of the over 10 trillion dollars of goods and services that are traded across borders each year.

Factors that Influence a Company's Capital-Structure Decision

For the company that markets itself properly on an international level, this can lead to a huge boost in revenue. Not only do businesses have a great opportunity to grow their revenue if they market themselves internationally, but they will also run into a lot of obstacles that are not typically encountered in domestic marketing.

There are a whole host of issues when marketing internationally that a business does not normally have to deal with when marketing in their own country.

The following are some key things to consider when making any international marketing decision.

Labor Costs

Language Language, more specifically translation, needs to be paid very close attention to when doing international marketing.

There have been some embarrassing mistakes in international advertising that most likely did not help companies sell their product.

Factors that may influence a firm s decision to go abroad

Gerber used the same packaging with the cute little baby on it they had used in America for packaging its baby food in Africa; they did not realize that with the high illiteracy rate in Africa that it was common for food packaging to display a picture of the contents inside. These types of language problems are funny to an outsider but can spell financial disaster for your international business if you are not careful.

Regional Values Many times a country to which you would like to sell a product has extreme regional differences that must be accounted for when marketing.

A perfect example of this is Canada; they have large French speaking populations around Montreal and Quebec that are culturally much different than the English speaking communities found throughout the rest of the country.

Consumer Habits Culture and personality combine to shape consumer behavior in every particular region of the world or country. When you want to market a product to a foreign country you need to first determine whether it is an individualistic society free-thinking culture or a collective society the peer group has the most influence on buying decisions.

Factors that may influence a firm s decision to go abroad

You also have to consider other societal and psychological factors that influence buying decisions in the country you are targeting to sell your goods or services to. Your company is probably not going to want to market laptops to senior citizens in a third world country where there is very little internet and where a large percentage of the citizens over 60 are computer illiterate.

This illustrates the importance of understanding age and other demographics on a potential country that you might sell your goods or services to since they are both reliable and used in making marketing decisions.

Relevant Class Structure When you are marketing your product or service internationally you must also take into consideration class structure because it varies widely from country to country.

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Most countries have an upper, middle and lower class, but the numbers of people in these classes can be significantly different from country to country.

Supply and Demand Of course supply and demand will play a major role in trying to market your products anywhere in the world. These days a company has to take a deeper look at potential markets than ever before because just about anything will sell if you market it the right way and in the right place.

Financial Transactions and Banking Considering how you will get paid for the products and services you market and sell internationally is important too. In the more prosperous countries it is taken for granted that you can buy goods internationally and pay for them with such things as credit cards, debit cards, online payment processors and cash transfer businesses, but that is clearly not the case everywhere in the world.

These types of financial realities will greatly impact your marketing strategy. Political and Legal Factors A. Laws There are laws in some countries that will greatly affect your ability to do business in them or prohibit it altogether.

Factors that Influence a Company's Capital-Structure Decision

You must be aware of laws like this if part of your product marketing strategy includes manufacturing or distributing your wares in a foreign target market country.The primary external influence on a firm's decision to go international is _____.

foreign demand for a particular product or service A company that starts exporting its products or services within two years of its establishment is called a(n) _____. INTERNATIONAL ENTRY AND COUNTRY ANALYSIS 1. Motives for Going International distinguish between the main overarching factors and the firm-specific factors that affect the decision to venture abroad (see figure 1).

Fundamentally, this decision is motivated by an government policies such as tax rates or financial incentives may influence.

In this article, we cover the topic of international marketing and explore 1) an introduction to international marketing, 2) factors to consider for international marketing and 3) a conclusion. INTRODUCTION TO INTERNATIONAL MARKETING Jet travel opened up the world to many people, and the expansion of the World Wide Web took that one .

The present paper will address decision making, in the context of types of decisions people make, factors that influence decision making, several heuristics commonly researched and utilized in the process of decision making. Factors Influencing Foreign Investment Decisions Now that you understand the basic economic reasons why companies choose to invest in foreign markets, and what forms that investment may take, it is important to understand the other factors that influence where and why companies decide to .

The decision making process regards the internationalization evolution as the choice of market, timing and mode of entry. According to D e BĂșrca, Fletcher & Brown () [1], decisions as to the form of market entry, for example, exporting, joint ventures or franchising, logically follow the decision as to the most appropriate market to enter.

Factors to Consider For International Marketing