Why would a currently-successful firm wish to expand its operations internationally?

Question

What will be an ideal response?

Answer 1

There are four main motives for moving into international markets: a) sourcing of resources and supplies, b) seeking to expand or to develop new markets, c) competitive rivalry, and d) leveraging core competencies and learning. Sourcing of resources and supplies leads to lower costs of production, which potentially increases profits. Expanding into international markets reduces the company's reliance on one market and balances its risk. If the firm has an intense rivalry with a domestic competitor, expanding into international markets may allow it to earn larger profits than it can domestically. Also, if the company's domestic rivals move into the international market the company must follow to prevent its competitors from gaining a significant advantage in another country. Finally, a successful company can apply its core competencies in other countries and/or it can learn new competencies that will help it develop future competitive advantages.