Global Marketing
...er base to achieve economies of scale. By going international the organization reaches more people. The more people you can reach the more products can be sold. With the creating of economies of scale, the domestic market can also be more efficient, especially towards competitors. Another advantage is the reduction of dependence on any one market. It therefore becomes less susceptible towards regional crisis. Foreign markets present as well higher profit opportunities than the domestic market. Summarizing all pros and cons, companies selling in global industries have no other choice but to internationalize their operations. To get a better overview of the risks and opportunities the new market consists of, the company has to scann the environment by an environment analysis. Normally this analysis is focused on the next three to five years. This kind of scanning includes the main points such like the social, legal, economic, political and technological environment. First of all the company has to decide wheather to go abroad or not. Most companies would prefer to remain domestic if their domestic market were large enough. Managers for example would not need to learn other languages and laws, deal with volatile currencies, face political and legal uncertainties, or redesign their products to suit different customer needs and expectations. Business would be easier and safer. Yet several factors are drawing more and more companies into the international arena. However, the main problem hereby is the availability of important resources. Does the company have the ability to internationalize their operations with the existing finance, the existing raw materials? Depending on those factors, most companies start small when they venture abroad. In deciding to go abroad, the company needs to define its marketing objectives and policies. The company must determine whether to enter in a few countries or many countries. In general, a company prefers to enter potential countries that rank high on market attractiveness, that are low in market risk, and in which it possesses a competitive advantage. The European Union, which was formed in 1957 with the goal to create a single European market by reducing barriers to the free flow of products, services, finances, and labour among member countries, was formed by only a few countries such like Germany and France. Today, the EU consists of 25 memb...