Businesses tend to resort to expanding internationally for several different reasons. Those reasons consist of having a cost advantage, growth and demand of a product, opportunity for growth, as well as market expansion. “Customers now expect the highest quality products to be delivered at the lowest market price.” In addition, to the increase in revenue, it also provides greater access to talent, provides foreign investment opportunities, and improves the overall reputation of the company. By expanding to international markets, it gives the company an advantage to new ways of remaining competitive.
An organization should “evaluate its readiness for internationalization and the attractiveness of the host country before deciding on the level of risk and control it wants to assume in each of the targeted countries”. These should include, knowledge as well as a strategy prior to entry into foreign markets. International franchising has been divided into three general categories: knowledge-based which includes previous experience, resource-based which proposes that the products will have a positive effect in the new market and finally, strategy-based which includes consists of product, price and strategy.
References
Hampton, A., & Rowell, J. (2013). An evolution in research practice for investigating international business relationships. Management Dynamics in the Knowledge Economy, 1(2), 161-177. Retrieved from https://libauth.purdueglobal.edu/login?url=https://search-proquest-com.libauth.purdueglobal.edu/docview/1517634826?accountid=34544
Alon, I. (2000). THE ORGANIZATIONAL DETERMINANTS OF MASTER INTERNATIONAL FRANCHISING. Journal of Business and Entrepreneurship, 12(2), 1-0_10. Retrieved from https://libauth.purdueglobal.edu/login?url=https://search-proquest-com.libauth.purdueglobal.edu/docview/214233644?accountid=34544
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