ASSIGMENT # 1

ZOHAIB JAVED SATTI

MBA-7
Why companies want to be a global ?

MORE CUSTOMERS.
Likewise, a small home market usually means customers are short supply. Which in turn affects
a companys potential for growth. Simple math here really: Bigger market = more customers.
The United States has roughly 4% of the Worlds population (and its shrinking every day). India
has 17%, China has 19%, and Southeast Asia as whole has 9% (these are all growing every day).
ACCESS TO A LARGER TALENT POOL.
Steve Jobs told President Obama that he needed 30,000 skilled engineers but he couldnt find
that many in the U.S. When you expand internationally youll have access to greater numbers of
highly educated professionals, skilled workers, and unskilled laborers.
MORE PROFITS.
Not only will you increase the number of potential consumers of your product or service, but you
may also be able to extract higher margins. When exporting products your costs will
undoubtedly change, but its been shown that consumers in developing countries will pay-up for
access to high-quality and well-branded products.
RESOURCES
Some companies go international to locate resources that are difficult to obtain in their home
markets, or that can be obtained at a better price internationally.
MORE EFFICIENT.
Its no secret that economies of scale are what made the largest companies of this era think
Walmart and Apple. When you increase your output via international expansion, you can often
do so with lower variable costs.
The importance of this is three-fold:
o You can increase your margins
o You can offset exporting costs with your decreased production costs
o You can keep your prices more competitive in your home country
faster and create better products.
Exporting your products will instantly expose them to consumers with different tastes, opinions,
and ways of interacting with the world around them. The knowledge gained will serve your
company well either by providing new insights about your current domestic offerings
or sparking ideas for new products that can serve both markets.

DIVERSIFICATION
Some companies go international to diversify. Selling products and services in multiple countries
reduces the company's exposure to possible economic and political instability in a single country.
ITS THE FUTURE
International expansion will soon be standard operating procedure for all but the smallest of
ventures.15 years ago it was the rare, forward-thinking company that had an online presence. It
was unheard of for all but the largest companies to sell products online. Now almost every
company has some kind of online store.
First-mover Advantage

The first-mover advantage is basically getting into a market and gaining all the benefits of being
first. For instance, youll able to quickly gain traction in a new market by being first. Another
benefit is youll get early adopters on board easier since theres no one else competing for their
attention.
Small Home Market
Finland for example is a small country with a population of approximately 5.5 million. And
while it has experienced great success with games like Clash of Clans and Angry Birds