CHAPTER 4
Building a Plan: Global Expansion Issues Vision is the art of seeing things invisible. – JONATHAN
SWIFT
( A N D F A I L U R E S ! ) S T A R T W I T H A N I D E A . Successful ideas are developed over time, in large part by examining the issues that will affect their possible success or failure. A good international business plan will bring up these issues and answer key questions about how the organization is going to turn its idea into a success. Therefore, before you begin drafting your international business plan, you and your senior managers need to do an analysis of the factors that will impact the proposed international expansion. Typically, this analysis is organized around four issues:
ALL SUCCESSES
ISSUE 1: ENVIRONMENTAL FACTORS Environmental factors are the external forces that flow primarily from outside the firm and create pressures, demands and opportunities for the business. This includes the business, industry and competitive environment that the company will face in each of the target markets. ISSUE 2: FOREIGN MARKET ENTRY Foreign market entry factors include all issues related to bringing the product or service to market in each targeted foreign market. ISSUE 3: GLOBAL FINANCIAL ISSUES Global financial issues relate primarily to financing the international venture, but also relate to international movement of funds, international payment methods, foreign exchange, repatriation of capital and receipt of profits. ISSUE 4: LEGAL AND REGULATORY ISSUES Legal and regulatory issues relate to the differences in laws and regulations of each of the proposed foreign markets and places of business operation. The results of this analysis will provide the essential foundation stones of your business plan. If you have already completed such an analysis, then a quick review of this chapter will be helpful to check whether you have covered all issues.
Issue 1: Environmental Analysis An environmental analysis is a thorough study of the risks and opportunities associated with moving into foreign markets in an effort to assess what the global business community has to offer your business. It is important in developing the company’s own strategies and procedures for the conduct of day-to-day operations and expansion. The end product of this analysis can be seen in the specific functional goals of the company as written into the business plan.
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