Global financial management

Anonymous
timer Asked: Mar 26th, 2018
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Question Description

Write a 5 to 7 pages.

The most popular way for international expansion is for a local firm to acquire foreign companies. One of the most benefits for international expansion is global distribution capability that helps expanding the market share.

There are different implications of running a company that is within or outside of the European Union. If you were the head of a firm based in the United States, please answer the following questions, providing the rationale behind your answers:

  1. Would you seek to acquire a company within the European Union or outside of it? Why?
  2. Describe the advantages and disadvantages of the choice you made.
  3. Describe the advantages and disadvantages inherent in the option you did not choose.
  4. Explain why an MNC may invest funds in a financial market outside its own country.
  5. Explain why some financial institutions prefer to provide credit in financial markets outside their own country.

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The most popular way for international expansion is for a local firm to acquire foreign companies. One of the most benefits for international expansion is global distribution capability that helps expanding the market share. There are different implications of running a company that is within or outside of the European Union. If you were the head of a firm based in the United States, please answer the following questions, providing the rationale behind your answers: 1. 2. 3. 4. 5. Would you seek to acquire a company within the European Union or outside of it? Why? Describe the advantages and disadvantages of the choice you made. Describe the advantages and disadvantages inherent in the option you did not choose. Explain why an MNC may invest funds in a financial market outside its own country. Explain why some financial institutions prefer to provide credit in financial markets outside their own country. Please submit your assignment. Grading Rubric: Grading Criteria Deliverable requirements addressed; understanding of material and writer's message and intent are clear Scholarly research which supports writer's position properly acknowledged and cited direct quotations may not exceed 10% of the word count of the body of the assignment deliverable (excluded title page, abstract or table of contents if used, tables, exhibits, appendices, and reference page(s). Inclusion of plagiarized content will not be tolerated and may result in adverse academic consequences. Critical thinking: position is well justified; logical flow; examples Structure: includes introduction and conclusion; proper paragraph format and reads as a polished, academic paper or professional presentation, as appropriate for the required assignment deliverable Mechanical - no spelling, grammatical or punctuation errors APA - deliverable is cited properly according to the APA Publication Manual (6th Ed.) Percentage 35% 20% 20% 10% 10% 5% ...
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Tutor Answer

ChloeL134
School: University of Maryland

Here you go! Let me know if you need any edits or have any questions
Attached.

Running head: GLOBAL EXPANSION

1

Global Expansion
Name
Course
Tutor
Date

GLOBAL EXPANSION

2

Global Financial Management
Introduction
Companies always target increased market shares to improve their access to more
consumers so that their products can be more helpful to a more significant number of people and
also to expand the company's net profits. Expansion of a business usually occurs at both local
and international levels, but the latter is the primary focus of the study. While most companies
would prefer development at local market levels, their targets and scopes may not be achievable
in the local markets and for that reason seeks to find alternative markets which in most cases,
refer to the global market. Global market expansion relates to the activities of a company in
markets that are different from its mother country and may be caused due to some factors like
challenges of operations in mother country or the saturation of the market in the company's
country of origin.
Expansion into European Markets or not?
In comparison to other markets outside of Europe that is the third world and Asia to be
precise, Europe still sways American investors to set shop in their countries. The advantages held
by the other markets are limited to minimum labor expenditure based on exploitation tendencies
of the said countries. Other countries like China and Japan are too competitive with trade
regulations too biased in favor of local companies to provide space for multinationals to thrive.
Many companies in the United States are torn on whether to base their global expansion into
Europe or to other commercial areas of the world. The European market constitutes 28% of the
worldwide GDP and hence is a significant operator in world business. On top of that, it boasts of
one of the world's most stable political situations, more so in continental Europe as well as a

GLOBAL EXPANSION

3

steady purchasing power among its citizens based on its economic strength and the rates of
unemployment which are relatively lower than other countries. The icing on the cake for
companies that choose operations in Europe is the trade tariffs, and barriers that have been lifted
in cross-country interactions within the European Union provides a platform for minimal
expenditure in business operations (Mendiluce, 2018).
Advantages of expansion into Europe
Brand expansion is the most obvious benefit that comes from international development
and the case with Europe is not different in any way. Having a company's product in Europe let's
say in Britain makes the British people aware of the existence of the product brand. Then there is
the issue of language barriers which is almost non-existent for cases of American businesses
expanding into Europe. The additional factors include friendly trade regulations not only
amongst European countries themselves but also with America. Once a company has established
an outlet in any of the countries in Europe, the operations within other countries of Europe are
guided by EU regulations which lift trade barriers and tariffs for trade amongst member states.
Infrastructural developments in the region are also up to date thereby easing the logistical aspects
of a business.
Disadvantages of European expansion
In as much as there is a commercial policy that regulates trade based on a shared
understanding of the countries on continental Europe, the administrative and social laws still
vary from state to country. Therefore in cases of multinational expansions within Europe, a
company has to adhere to the diversely different rules and regulations in the member countries
which is a relatively time-consuming and challenging task. For instance, Germany has stringent

GLOBAL EXPANSION

4

privacy policies and thereby always pits them in clashes with social media platforms Facebook
and Google. As for tax rates for corporation tax, Malta charges 35% while Ireland's stands at
12.5% just to quote but a few of the individual discrepancies.
Though Europe has the cultural advantage on other potential are...

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Anonymous
awesome work thanks

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