Reasons Why Businesses Expand Globally

Investigation Report Part 2 – Extended Response

A business expanding globally is very common today in the economic world. There are a variety of reasons why a business might expand to an international market. Staying competitive with other businesses, higher sales in different markets, diversification of products and easing the impact of the economic cycle are all reasons for a business to expand internationally. Sony has been able to put these ideas to good use and become a very sizable conglomerate company, having stores and services all around the world.

Different markets have varying components which can lead to higher sales and the growth of a company, therefore potentially drive the reason for a business to expand globally. India and China have a market of over 1 billion people, if a company were to expand there, sales would increase dramatically because of the sheer amount of consumers that would possibly buy their products. If Sony had not expanded to large markets such as America and China, they would not have grown into the multinational, multibillion dollar company that they are today. Because Sony expanded to these, this allowed more individuals to notice and try out their products, which lead to an increased consumer base and turned them into one of the largest companies in the world. This shows that expanding to different markets can have a large positive impact on the sales of a company.

Another reason for a business to expand internationally is to stay competitive with rival businesses. A company always strives to be one step ahead of all of its rivals, one way that this can be done is by expanding to global markets. By expanding to global markets, you are not only increasing the amount of sales possible, but you are also getting ahead of rivals as your company is learning more about the overseas markets and their practices. As a result expanding internationally, Sony has gotten a large competitive edge over many rival companies. This is...