What are some of the advantages and disadvantages associated with a firm’s expansion into international markets?

Advantages
-gain revenue
-lower transportation + input costs
-access knowledge from human capital worldwide
-access to world-class suppliers, human resources, technology, customers

• Gain revenue: By expanding into international markets, firms have the potential to access new customers and markets, which can generate additional revenue streams. This can be particularly important if the domestic market is saturated or experiencing slow growth.
• Lower transportation + input costs: By locating production or sourcing materials in international markets, firms can potentially benefit from lower transportation and input costs, which can increase profitability. This can be especially beneficial in industries where transportation or raw materials costs represent a significant portion of overall costs.
• Access knowledge from human capital worldwide: By expanding into international markets, firms can tap into a broader pool of human capital, which can provide access to diverse skills, knowledge, and perspectives. This can be particularly important in industries that rely on innovation and creativity.
• Access to world-class suppliers, human resources, technology, customers: By operating in international markets, firms can potentially access world-class suppliers, human resources, technology, and customers. This can provide a competitive advantage, particularly if the firm is operating in an industry where access to the latest technology or the best suppliers is critical. It can also help firms improve their products, services, and operations.

Disadvantages

challeges dealing with governments w/o businees friendly policies,

-poor/illiterate populations, unstable infrastructure and currencies,

-subject to competition (may hurt profits in the short-term, can be advantage in long-term as it improves technology, products, services, productivity)
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1. Challenges dealing with governments without business-friendly policies: Different countries have different legal systems and regulatory environments. Some governments may impose strict rules on foreign companies operating within their borders, while others may have policies that favor domestic companies. Dealing with governments that have unfriendly policies towards businesses can make it difficult for a foreign company to operate effectively, leading to additional costs, delays, and legal challenges.
2. Poor/illiterate populations, unstable infrastructure and currencies: Expanding into international markets can also bring challenges associated with the local population, infrastructure, and currency. In some countries, the local population may be poor and illiterate, which can make it difficult to find qualified employees or customers. Infrastructure such as roads, ports, and telecommunications may be inadequate or unreliable, which can increase operating costs and lead to delays. Currency instability can also make it difficult for companies to plan and budget, as exchange rates can fluctuate rapidly.
3. Subject to competition (may hurt profits in the short-term, can be an advantage in the long-term as it improves technology, products, services, productivity): When a company expands into international markets, it is likely to encounter competition from other local and foreign companies. Competition can lead to lower profits in the short-term, as companies may need to lower their prices or invest in additional marketing and advertising to compete effectively. However, competition can also be an advantage in the long-term, as it can lead to improvements in technology, products, services, and productivity. Additionally, competing in international markets can help companies to gain experience and knowledge that can be applied to their home markets, making them more competitive overall.