This will allow it to reach a wider audience and diversify its operations. In the first part of a series on taking your small business international, I’d like to discuss why it might make sense to expand your business to a foreign country. If local authorities deem that your hire is a de facto employee rather than a contractor, you’ll be on the hook for back taxes and penalties. However, while employment laws vary by country, the labor laws of most jurisdictions greatly favor the worker over the employer. With expert guidance, determining the optimal legal entity to establish will likely be easy, though it may be more time-consuming and costly than you’d anticipated. Firms can also penetrate foreign markets by establishing new foreign subsidiaries. Launching that product again in a different market, toward people with a different culture and a different budget can mean an entirely different, much more positive reception for that product. No matter what your scenario when expanding internationally, due diligence well in advance will be rewarded. 22609 Views. International investments refer to investments by entities of a nation in nations other than their own.Foreign investments involve export of capital. Opportunity to specialize. The classical theory of international trade is popularly known as the Theory of Comparative Costs or Advantage. Theories of FDI may be classified under the following headings: 1. The economist John Dunning has identified four primary reasons for corporate foreign investments (Global Capitalism, FDI and Competitiveness, 2002): In the continuing evolution of international trade theories, Michael Porter of Harvard Business School developed a new model to explain national competitive advantage in 1990. In general, any method of conducting business that requires investment in more than 10% of foreign operations is referred to as a direct foreign investment (DFI). It also explains why a competitor brand - Gloria Jeans - has succeeded where Starbucks failed. You may wish to maintain a light footprint, hiring just one or two local contractors in country. There are many other factors to consider, including employee benefits and managing stock options across multiple countries with different guidelines and regulations. A company may want to reduce costs by relocating closer to a supplier or benefit from lower production costs by expanding operations to another country. Distributing your products in additional countries increases your customer base. Simply, they offer a means by which to attempt to understand a complex world. But while every successful company will employ its own particular strategy, the underlying mode of operation—the character and trajectory of all successful companies—is fundamentally the same.Companies achieve competitive advantage through acts of innovation. At Vistra I work with many companies looking to expand internationally. Closely connected to the goal of improved profit margins is the desire to increase sales. Businesses evolve, and plans change, and a company may start to realize that it needs to get involved in international marketing. That way you will actually be operating as an international company in the US, rather than a domestic company. International markets can open up … Going international is a strategy that is influenced by a variety of factors and is typically implemented over time. To identify the overview of international petroleum industry, it include all companies that are involved in the oil and gas production chain as shown in Fig 4.1 (PetroStrategies Inc, 2010), from the owners of the resources to operators, drillers, equipment manufactures, facility constructors, service providers and engineering companies. If you do decide to hire or keep the worker as an employee in the new country, you’ll not only have to establish a locally compliant payroll, you’ll have to comply with all local labor laws. This is the reason why many international businesses operate in Africa and South Asia where the humungous deposits of minerals and metals are attractive for the profits that these multinationals can make. In addition to mobile devices, the company is planning to sell electric folding bikes, self-balancing scooters, fitness bands and other products. The benefits of entering international markets include generating more revenue, competing for new sales, investment opportunities, diversifying, reducing costs and recruiting new talent. This superb video from CNBC explores why Starbucks failed to establish a leadership position in the $6bn Australian coffee shop market.. As international relations has grown in complexity, the family of theories that IR offers has grown in number. 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theories that explain why companies expand internationally