International Business Expansion Risks

International Business Expansion Risks

International business issues today are a lot more for brand that have been looking at expansion on international waters. They have to pay heed to a lot of things during their expansion phase in host country.

Franchisors who wish to set base in a foreign location of their brand have to make note of a few basic things like – Chalking down the prospective countries which will fit the bill for their product or service, finalizing the location, understanding the market dynamics for the demand of your product or service. It also includes getting insights on who are your competitors, overcoming language and dialect barriers, and the most important being the various government permissions that needs to be taken before you start.

The other types of risk that is involved while expanding in foreign location is – Financial capabilities, local labour/man power issues, market un-certainties. The franchisor should also look at adopting the local tastes and preferences and make changing in their product or service offerings.

Something like what Mc. Donald’s did in India, Mc Donald’s the US fast food major is popularly known for its beef burgers throughout the world, but the totally had to revamp there offering in India. As India is not a major beef consuming country, it has to adapt to local preferences and therefore concentrated more on products of chicken. They also had to rework on their menu when they entered Gujarat – It is a vegetarian state of India and therefore the product offering was totally reworked. Considering the above example, it is easy to grasp that there are a lot of international business issues today, for franchisors when planning to expand out of India.