1. Explain three forces leading companies to pursue international operations.2. Explain the concept of protectionism. Describe at least one impact to international business strategy.3.Identify at...

1. Explain three forces leading companies to pursue international operations.
More and more companies are expanding outside their country of origin to pursue international
operations. Organizations like WTO and OECD have made sure the trade barriers are reduced
between countries. Technology has made the world a global village and has made sure that
businesses can afford to expand its footprint across the globe. We look at reasons which have
forced companies to pursue international operations.
 Market: The heightened domestic competition has forced companies to go international. This
enables the companies to earn a greater return from its set of core competencies. Expanding
to international markets reduces dependencies on the local market and hence reduces the
risks of operations. New markets also sell excessive production capacity and insulate the
local markets.
 Costs: The economies of scale in procurement and production are easier to achieve when the
business operations are spread internationally. The global supply chain is another reason
companies operate outside. Outsourcing production to cheap labor countries brings down the
cost of production significantly.
 Investors and tax: When the business has global footprints, it has the possibility to attract
investments from potential investors from across the borders. This helps working capital
availability for the company. Countries provide tax benefits to companies in form of SEZs
and other corporate benefits.
2. Explain the concept of protectionism. Describe at least one impact to international
business strategy
The concept of protectionism is one in which the government and its policies limit international
trade and puts stiff entry barriers for...