Why do we companies go international?

Growth - The home market could be saturated and/or competition is too fierce. Increasing sales by going international allows for realization of economies of scale.

Diversification - If the economy is bad at home during certain periods, it may be best to diversify elsewhere

How to expand internationally?

Exports - The company's products are sold in foreign countries either through e-commerce, through exclusive dealers or via import-export companies that are willing to move the product and sell it.

Licensing of Production - In some cases, foreign companies can be granted exclusive licenses to actually produce the product in the foreign market according to the specifications set by the licenser.

Franchising - A franchisee with local knowledge may be better suites to running the business in a foreign country. The franchisor may grant exclusive agreements to an individual or a company to run all the outlets in a given company, or rely on many different local and international franchisees

Joint Ventures - The local partner could be expected to bring his/her knowledge of the country's culture and business climate to the foreign company to expand operations. A joint venture must have established clear divisions of responsibilities.

Foreign Direct Investment - The company expanding internationally can decide to stay alone and build its own operations in a foreign country, usually through a subsidiary. This allows complete control over foreign operations. The company's lack of knowledge of the foreign country can be corrected by hiring local managers.

Companies that go international have a choice to make between these two strategies:

Standardisation:

• The product and the marketing mix is basically the same worldwide

Localisation:

• The product and the marketing mix are ADAPTED to local conditions