More and more companies are expanding their business to foreign markets. This process has been influenced by numerous factors, among which a critical role is played by technological advances. It has become much easier to sell products or to outsource abroad. Sometimes, it also appears to be financially reasonable to purchase products from the manufacturers abroad. The amount of goods sold outside of their country of origin has grown by three and a half times since 1950. Furthermore, it increased from 7 per cent to approximately 25 per cent last year. The change is certainly impressive. This phenomenon is caused by a simple circumstance, as the globalization is changing many things about the way people live and do business https://top-papers.com/poem-writing-paper/.
For a modern company, it is crucial to expand internationally because such an expansion certainly makes the company open for new horizons and opportunities. Meanwhile, it is wrong to overlook the challenges which it causes and the difficulties which it actualizes. XYZ Company planning to expand into Turkish market would first seek to expand the sales. The local market has only a limited capacity, which may, certainly, increase over time, but expanding to a foreign market may appear to be a wise step in the right direction. Besides, Turkey is a tourist attraction and thus many foreigners come to visit this country, meaning that the expansion into Turkish market may turn out to be similar to placing goods in the shop window for more people to be able to see them. However, expansion largely depends on the type of the products which XYZ Company is manufacturing and whether it may be of any interest for tourists.
Another goal behind the CEO’s decision to expand abroad may be the diversification of markets. Recently, the world has seen a number of crises. Consequently, companies which depend merely on their domestic markets are subject to more significant risks during these crises in their countries. If their domestic market slows down in its development, crises will also hamper their development, or, at least, they are likely to do so. Some companies may even face the risk of bankruptcy during the periods of significant economic turbulence. However, for many companies, the risk is certainly worth taking. Thus, XYZ Company would also take the risk counting on the creativity of the team and the innovative strategy which is capable of significantly lowering risks associated with foreign expansion of a company. The company would seek to achieve two major objectives, namely increasing its level of sales as well as gaining additional stability.
Concerning the mode of operation for XYZ, one should first assume that the company is not a large one. Smaller companies oftentimes prefer such modes as export and import to other possible modes of international business. As a CEO, I would first look towards exporting, as XYZ is a production company and thus it requires new markets for the realization of its goods. Furthermore, Turkey is a comparatively large market; therefore, I would choose to expand to Turkey to minimize the risks associated with slowdowns in domestic economy. Certainly, it would be important to research thoroughly Turkish markets because lack of knowledge of local peculiarities may turn out to be an obstacle. As a result, it may lead to quite unfortunate results and even the failure of operations in the target country. It may be a good idea to hire a local specialist who would be responsible for the expansion because the failure to recognize certain purely local challenges and opportunities may be dangerous for an expanding company.
Among the most important factors which the company is likely to face when expanding to Turkey is expenses on logistics, local competition, and the failure to understand local cultural peculiarities which may lead to inability to meet expectations of local customers. To deal with these factors, the company would first attempt to make a quick massive expansion, hence minimizing logistical expenses by shipping larger amounts of goods and reducing the price per item. The company would also offer innovative goods to avoid competition with local companies producing similar goods. Lastly, XYZ would hire a highly competent local representative, who will be aware of local cultural realities and thus able to help the company avoid making mistakes related to lack of knowledge of local realities.
Certainly, more data on the hypothetical company would allow us to make more precise offers, but the general actions of XYZ’s CEO would be the ones outlined above. Certainly, it would be wise for the CEO to take the expansion seriously and address the issue with all proper care and caution, particularly in case this is the first expansion of the company abroad, which is most likely. Such expansion may not only add stability so important in modern turbulent time to the company, but also help it significantly increase the speed of its growth. Hopefully, it may appear to be just the first step in the direction of the company’s global expansion. The growth and the expansion may also stimulate XYZ to achieve perfection in its strategic planning and in the quality of the products developed and manufactured by the company.