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:
- 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. 6-7 pages
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Running head: INTERNATIONAL MARKET
In the European Union, a company may or may not achieve as much as they would
expect. If a company from the United States of America gets into this market there should be a
careful understanding of the very market and how to invest in it. Given an opportunity of
choosing the market or not as a manager of a company in the States than not joining the market
would be the best choice. The reasons behind the choice are in this paper.
There is no common language. The only way a business can get to the top is when there
is a language that they can speak to its customers and sell them their commodities. Since there is
no common language in the EU then it becomes more expensive for a business because they
have to pay more people who can speak various languages that exist in the union market
(Scharpf, 1998). When such happens then it would mean a difficult budget for the company.
Suppose there was a common language then the business would just deploy a few individuals to
conduct the business with a lot of ease and efficiency.
The boundary of the EU is not well in the definition. It is always a good thing as a
marketer to know the boundaries that you are working with (Scharpf, 1998). It will enable the
company to know the exact market they are to deal with and how much of the commodities they
should bring to the very market. In the case of the EU, it is not yet defined where it ends since
nations like Morocco still seeks to have their membership approved. With a well-defined market,
the company can invest since the rate of return is easy to arrive at.
There are a lot of restrictions by the regulations in place. It is even more difficult for a
business with its base in the United States to make it in the EU market because they consider
them as rivals (Eichengreen & Hausmann, 2010). They are always set to ensure that other
superpowers do not get to the place that they are hence it is difficult to have them approve the
companies form their rival states ...