Economy 09:Expanding Overseas: Part II -------------------------------------- You are the CEO of a Saudi Arabian company that is seeking to expand to foreign markets and establish itself as a global...

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Economy 09: Expanding Overseas: Part II
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Economy 09: Expanding Overseas: Part II
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Introduction
A company can enter into foreign markets through various modes of entry which depends on the kind of business and the various globalized strategies that are being followed by the company in order to overcome different trade ba
iers. There is no single globalization strategy that would be successful in all the types of businesses that are looking for expansion in the international market. This is because of the different governing rules and set up of institutions in different countries which do not allow following the same strategies of business at all the foreign locations of the same business. In the paper, we will discuss about the global expansion strategies and policies for setting up Oil-export business which makes use of export based global expansion strategies. Also, expansion of a global asset manager company which makes investments into foreign countries and hence use the equity investment overseas approach to become a globalized company. Factors which directly or indirectly influence the strategy choice would be explained such as costing involved in transporting the goods, using marketing strategies to advertise its products into foreign market, etc.
Export-based globalization strategy
As a CEO of the company in Saudi Arabia who is looking to expand its oil business into international market, it is best to make use of direct exporting strategy into foreign countries. It makes use of identifying the size of the market on the basis of the size of the firm depending on whether the firm is small internationalizer or enthusiastic internationalizer. Since the given product- oil is the most demanding product in the foreign market; therefore it would make the future plan of expansion on the basis of resource-based considerations of the firm. Since the firm has production capability of producing ample volume of oil which is a necessity product in foreign market, therefore the value of the product is quite high for the firm and it can easily develop its position in foreign land. However, this product is not rare in Saudi-Arabia to be exported to other countries but it is definitely rare in developing countries such as India and developed countries like UK who import most of their oil-based products from these Middle-East countries only. The transaction cost would be dependent over the distance and the availability of the mode of transportation from Saudi Arabia to the foreign countries. Most easy and convenient option is to transport oil through waterways which would enable shipping of huge volume of oil at minimum cost of transportation.
The business would be successful using this...