FRAMEWORK
International Expansion is one of the popular growth strategies for organizations looking to expand their business offerings in the other similar markets across the globe. A typical problem statement in this category might look like one below –
Reference Case Study: An infrastructure company is looking to expand operations in the international market. What all things should they consider before entering the market?
Extending ones’ products & services to another geography often comes with its own challenges and complexities. It can range from setting up manufacturing facilities to availing distribution channels in the region. Political stability, Economic growth & Cultural fitment are the other key areas that play a critical role in the success of any business in a region. This section discusses a step by step approach that a candidate can opt, for structuring his thoughts while solving such a case study in a business interview.
IDENTIFY THE OBJECTIVE
An organization can plan for an international expansion resulting from a variety of underlying reasons & goals. Identifying the objective at the start of the interview itself helps the candidate in framing his thoughts for a relevant analysis.
Possible Objectives for International Expansion
- Boost Brand
- Increase Revenues / Sales
- Increase Profitability
- Diversify Business Holdings to Reduce Risk
Depending on the case objective, one of more of the following analysis would be required to evaluate the international expansion option for the client –
1. Cultural & Management Complexity
- Language and cultural barriers?
- Which countries would be a good fit for current leadership’s working and managerial style?
- Can our current leadership adapt to the cultural & managerial working style of other countries?
- Is geographical distance a problem to manage assets?
2. Political Environment
- What are the current regulations for our Industry? Labor laws? Licenses required?
- Is the political climate volatile in the country? How high is the probability for changes in regulation in next few years?
- Is the country receptive to new businesses?
- How is ease of doing business rated in the country?
3. Competitive Advantage
- Who are the current market players in the Industry? Is there a presence of International players?
- What are their market shares? Financial health?
- Competitors expected response to the new entrant?
4. Economic Prospects
- How is the country performing economically?
- How is the Industry performing within the country?
- Is it growing, de-growing or flat over recent years ?
It is important to understand that not all the analyses discussed above will make sense in a particular business scenario. The framework presented above is only to help candidate in structuring his thoughts in a more presentable way.
