Seeking Expansion Overseas

Today’s globalization  makes moving internationally sooner a much more attractive opportunity.


A recent report from PricewaterhouseCoopers states that:

• barriers to global trade will continue to come down;
• developing markets will continue to phase out restrictions on foreign retailer operations and liberalize regulations of direct foreign investment;
• global expansion a key source of revenue and a necessity, not an option, for retailers;
• growth of middle class consumers around the  globe is a key driver of these international opportunities.

Company should not longer concentrate on the domestic marker, because of high speed of saturation and limits on growth perspectives! This actually refers to American Apparels, which is still is more concentrating on its home maket.

It's also important to look at the following information and make conclusions:

The general factors that drive retailers today to expand abroad are the following:

While the obstacles can be the following:

• Liability of foreignness – this liability arose from the cross-cultural, social, political differences between host and home country, and lack of knowledge how to do business in this or that particular country. ·                
• Liability of expansion - causes difficulties associated with the increase in scale of company’s operations and includes transportation, coordination and communication obstacles. 
• Liability of newness - causes difficulties associated with lack of knowledge how to do business in the new country and with lack of experiences in host country’s nature of transactions. For example it can be problem of dealing with local authorities, especially in the emerging countries.