IBUS-300 Lecture Notes - Lecture 13: Predatory Pricing, Profit Margin, Franchising
11 Dec 2018
School
Department
Course
Professor
Document Summary
The decision of which foreign markets to enter; when to enter them, and on what scale. With 200 countries in world, not all hold the same profit potential for a firm contemplating foreign expansion. Economic and political factors influence the potential attractiveness of a foreign market. The attractiveness of a country as a potential market for an international business depends on balancing the benefits, costs, and risks associated with doing business in that country. Demographics, purchasing power, living standards and economic growth are also important factors to take into consideration. Benefit-cost-risk trade-off is likely to be most favorable in politically stable developed and developing nations that have free market systems and where there is not a dramatic upsurge in either inflation rates or private sector debt. Time of entry: entry is early when a firm enters a foreign market before other foreign firms and late when a firm enters after other international businesses have established themselves.
