Name: Nguyễn Thế Bảo

Class: EBBA 12.3

Individual Mid-term Assignment

1. Why do businesses should think about international expansion strategies?

International expansion can help a company gain a lot of benefits. However, to expand to other
nations, A company has to choose some possible and viable strategies, which ensure the success
of the expension. There are some advantages that a company can receive when go to abroad(
expansion motivation):

• INCREASE REVENUE POTENTIAL

When domestic expansion prospects are exhausted, organizations look to global expansion to
help them grow. For many businesses, foreign growth provides an opportunity to explore new
markets and get access to millions of potential clients, resulting in increased revenue.

• ENTRY TO NEW MARKETS

It's time to explore into markets outside of your native country once your company has
established itself in your home country. However, research is essential before entering a new
market. Whether you're trying to expand into emerging markets in South America, advanced
technology hubs in Asia, or developed markets in Europe, each region has lots of options.

• NEW CUSTOMER BASE

Another advantage of growing internationally is that it allows you to not only offer your present
product or service to new customers, but also to invest in and introduce new products and
services. You can generate more revenue and enhance sales with a much larger customer base.

• EXPANSION ALLOWS YOU TO DIVERSIFY

Keeping your company in the home market can limit your profit possibilities. When a company
exclusively operates in one country, one of the disadvantages is the susceptibility to market
changes. Taking your business abroad allows you to diversify your markets and increase the
stability of your revenue. If your native market is slowing down, having access to a worldwide
market will help cushion your business during these difficult times.

• GREATER ACCESS TO TALENT

Another big advantage of expanding your firm internationally is that you gain access to a far larger
pool of talent. Hiring international talent can provide a number of benefits, such as improved
language abilities and a variety of educational backgrounds. Furthermore, growing abroad allows
businesses to hire local staff with the expertise to communicate with and serve their clients
(within the same time zone) without difficulty.

• GAIN COMPETITIVE ADVANTAGE

Prepare to enter the market ahead of your competitors. Expanding internationally allows you to
break free from a crowded market. Expanding internationally allows you to reach new clients and
enter markets where your competitors do not compete.

• COST SAVINGS
A business can cut its operational costs and save money by establishing itself in a new country.
Because of lower labor costs and more readily available skills, many corporations have found it
advantageous to relocate portions of their manufacturing operations to foreign markets.

International expansion strategy not only help the company take all the advantages of global
market, but also overcome the drawbacks. There are some disadvantages that a company
should consider:

• THE COST OF FORMING AND DISBANDING A BUSINESS

It can be quite expensive to build infrastructure, establish a corporate entity, and pay local
personnel. Not to mention, it's a time-consuming process. The government of each country works
in a unique way. As a result, you may need to hire lawyers, local tax accountants, and foreign HR
professionals to work legally and compliantly. In addition, continuous costs are necessary to keep
the firm functioning smoothly. They may wish to shut down the operation if their plans don't pan
out. Closing operations in some nations can be costly and time-consuming.

• BUSINESS PRACTICES AND CULTURAL OBSTACLES

It is preferable to obtain some cultural training in both business and social customs. Language
barriers can also be problematic. As a result, knowing the language of the country is
advantageous. This will also make the move to the new country go more smoothly.

• MANAGING OVERSEAS PERSONEL – HR PAYROLL RESPONSIBILITIES

Going global has a lot of benefits. Hiring international staff, on the other hand, necessitates a
new level of HR support and administration. If you don't have the necessary skills in-house, you
may need to outsource.
2. By making decision to become "the world's local bank", which international strategy
(global strategy, multi-domestic strategy or transnational strategy) has HSBC
chosen? Explain why?

By making decision to become “ the word’s local bank”, HSBC had chosen transnational strategy.

HSBC launched its campaign "The World's Local Bank" in 2002. They advertised using the acronym
for global recognition on the one hand, but they also made posters portraying the normal local
connotations of everyday acts and objects on the other hand, to respond to local demands. it
includes elements of trasnational strategy(A transnational strategy is an international strategy
through which the firm seeks to achieve both global efficiency and local responsiveness)