1. Reasons for Going Abroad 1) Market Factors ❖ Limited growth in domestic market □ The company’s domestic market might be stagnant or shrinking; □ For example: Tesco’s move into the Far East, the US, and Central and Eastern Europe. ❖ Small domestic market □ In some industries, survival means broadening scope beyond small national markets to the international area. □ For example: Philips, Nokia and Electrolux could not compete against the strength of global competitors by servicing their small domestic market alone. For them, internationalisation was not an option: it was a fundamental condition for survival. ❖ Foreign markets attractive □ The company might discover foreign markets that present higher profit opportunities than the domestic market does. 2) Competition Factors ❖ Global competitors offering better products or lower prices might attack the company’s domestic market. The company might want to counterattack these competitors in their home markets to tie up their resources. (Kotler, et al. 2004). ❖ When several companies in an industry go abroad, others feel obliged to follow suit to maintain their relative size and growth rate. This is particularly true in oligopolistic industries. 3) Cost Factors ❖ High national labour cost, shortages of skilled workers, and rising energy charges can raise domestic cots to uneconomic levels. These factors may stimulate moves towards foreign direct investment in low-cost areas such as Taiwan, Korea, and Central and Eastern Europe. ❖ Expanding into foreign markets can also reduce costs by gaining economies of scale through an enlarged customer base. 4) Customer Factors ❖ In some industries customers may expect their suppliers to have an international presence. ❖ For example: advertising industry, where clients requiring their