Global Expansion Strategy Key Terms

Learn more about using the global expansion strategy in management

A global expansion strategy is a way for businesses to enter foreign markets simultaneously with the same product or service. This allows for a standard in production and customer services throughout the markets where a business has a presence. While a global expansion strategy may not work for all businesses, it can be customized to meet the financial and operational needs of a business when located in one or more foreign markets.

Product life cycle

Product life cycle is the complete cycle of a product from development to the decline in interest from consumers. A global expansion strategy can expand the life cycle of a product by offering older products to less developed countries.

Risk

Implementing a global expansion strategy can diversify risks, making less of an impact on one particular sector of a business. Businesses can take on many types of risk including operational, economic and labor risks.

Competitive advantage

The competitive advantage of a business is the position that it takes against competing businesses. A company can have this advantage through costs, focus and differentiation between products or services provided to the consumer.

Multi-domestic strategy

Multi-domestic strategy is a type of strategy similar to global expansion, but different in that, instead of providing a single product to all markets, products are customized to individual markets resulting in more localized control over decision-making practices.

Market share

A market share is the proportion of the market that is controlled by a company producing products or offering services for that particular market. Global expansion strategies must consider the percentage of market share in each country where the company will introduce products or services.

Foreign market entry

To globalize a company, the company must have a plan on entering foreign markets. There are four ways a company can enter a new market: through licensing, exporting, joint venture or foreign direct investment. Each method has its pros and cons.

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