Reasons for using the selected strategy
Reasons for using the selected strategy
The speed at which operations are set up
When considering operating overseas, one must consider how quickly a business needs to do this. This can affect their decisions. For example, if competitors are likely to start trading in the country, a business may want to move quickly.
Access to local business knowledge and expertise
Decisions based on the use of local human resources can be beneficial. For example, local franchisees are likely to know the market in their country.
Cost Control
Some strategies are likely to incur more costs than others and a business will need to be aware of the impact on their cash flow. For example, setting up or buying a company in a foreign country is expensive and can take time while collaborating with other companies could be cheaper.
Risk management
While strategies that favour working with other businesses can be faster and more cost effective, they are not risk-free. For example, a company's reputation can be dependent on the quality of a product or service so giving other businesses the right to produce a product, e.g. through licence agreements, puts a large amount of responsibility for quality in the hands of another company.