If they would have gone in blindly, then they would have had to take a lot of time building relationships with customers and acquiring a good reputation. What aspects of European Union markets have particularly encouraged horizontal growth of the Davis Service Group? What aspects of European Union markets have particularly encouraged organic as opposed to inorganic growth? If a company expands to the European Union, then they automatically have over 500 million potential customers (Davis, n.d.). Because all 27 countries are joined together, it is completely easy to exchange goods and services.
External expansion strategies are now hitherto an integral part of the globalization and internationalization movement by enterprises. Foreign markets are now contributing to significant growth paths of businesses in terms of their bottom line. Innovation and best practices are now easier to capitalize or access through simply acquiring foreign operations of relevant companies to their business. There are two ways in which a company can growth namely organic and inorganic. Organic growth is a strategy where an enterprise develops by making use of its current business base and leverage.
After going through internet, I had this to quote. www.loc.gov/rr/business/BERA/issue1/trends.htm... As the economy grows slowly at home, your business may have to look at selling internationally to remain profitable. Before examining foreign markets, you have to be aware of the major trends in international business so you can take advantage of those that might favor your company. International markets are evolving rapidly, and you can take advantage of the changing environment to create a niche for your company. Growing Emerging Markets Developing countries will see the highest economic growth as they come closer to the standards of living of the developed world.
There is a huge potential market in the EU. There are over 500 million potential customers in the UK. Goods and services are free flowing in the European market which makes it easier to so business in the EU. Due to the newly developed transportation channel tunnel and high speed trains, people are able to travel across the EU more easily. Through technology you can instantly communicate via the internet and email.
Businesses worldwide nowadays have been expanding their business sphere beyond national borders to reach new markets in other attractive countries. While doing business abroad can provide a multinational with new, exciting, and profitable markets, there are, however, a number of challenges inherent to operating in a foreign market that should be accounted for when formulating an entry strategy. For instance, they must consider whether to merge with another company, take over it, or just make a greenfield investment. In order to eventually see their foreign venture succeed, multinationals should be very careful in examining the entry strategy and the aimed market itself. In doing so, there are many types of expansion strategies that are commonly
A famous example of such a company is Amazon. After being successful at selling books, they started selling electronics and various other products in order to not only increase their profits, but also their market base and customer reach, fulfilling the needs and demands of the market. This can also be done by expanding into new and different geographic markets and locations. In business, horizontal integration is a strategy where a company creates or acquires production units for outputs which are alike - either complementary or competitive.
Vertical integration includes two types as well- “backward” and “forward” (The Times 100, 2013). For example, when Sunlight joins with a firm that makes hotel sheets, this is called backward vertical integration; when Sunlight joins with a company that distributes and transports the sheets, it is called forward vertical integration. Both “backward” and “forward” vertical integrations can benefit Sunlight from production quality control to the cutting down the operational cost. Besides the merger, a company can also grow through the “take over” or acquisition, such as the Davis Service Group acquired Berendsen, a successful textile service company that operates in several EU countries such as “Denmark, Sweden, Norway, Austria, the Netherlands, Poland and Germany” (The Times 100, 2013). This is an example of a horizontal integration.
By doing this company can easily increase their sales and growth. 7. “New competitive arenas”: Companies can fit in in different vertical to exploit some opportunities available in different sectors. And it’s also benefits to company because company also can use their skills. Zealong also can adept this strategies so company can increase their growth.
EXECUTIVE SUMMARY • This is a study that shows the various entry and expansion strategies that are available for a firm when choosing to go global or increase market share within the market. • There are various strategies found out , they are : Exporting and importing , Joint Ventures, Strategic Alliances, Franchising , Licensing and Foreign branching. • In exporting and importing, firms choose between direct involvement and indirect involvement. This is the level of involvement with the foreign customers. Most firms prefer direct involvement due to the costs and risk of having an intermediary do the communicating in the foreign market.
For example, if an organization has a contract with a supplier for buying a maximum possible amount of a product, but the business scenario changes and that organisation needs more amount than the earlier agreed fixed amount for a certain period of time. It has to negotiate with the supplier again to buy at a relatively higher amount, but it depends on supplier to deliver more than what is agreed previously. Now, if the organisation is producing that product itself, then just production needs to be increased. Now it has the control to increase or reduce production at will, that’s why supply chain is much more coordinated. In addition to this another benefit of vertical integration, is that your organization will be able to invest in highly specialized assets.