Instractions
Choosing Geographic Sites
in choosing geographic There are two interrelated questions concerning geographic areas of emphasises, a company must de- sis: (i) which markets should be served? (2) Where should production be Clde, located to serve these markets? Frequently the answer to these two questions
• Where to sell
• where to produce De the same, particularly if transportation costs or governmental regula-
tions require local production for serving the chosen market. In other cases, however, the sales and production may be in different countries. For example, Ford serves the French market in vehicles produced primarily in its German production facilities.
The market and production location decisions may be highly interdependent for other reasons as well. For example, a company may have excess production capacity already in place that will influence its relative capabilities of serving different country markets, or a firm may find a given market very attractive but forgo sales there because of an unwillingness to invest in needed production locations.
A firm's international objectives should not be substantially different from those that guide domestic actions. Any foreign operations should complement domestic ones, and vice versa, so that fulfillment of overall company goals is enhanced. Because of each firm's uniqueness, the decisions of where to sell and produce can be quite variable. Firms seeking foreign markets, for example, will have different considerations from those that view foreign operations as a means of acquiring scarce or cheaper resources. Furthermore, even if the objectives and situations were similar, differences in patterns would remain because of varying assumptions about such unknown factors as future costs and prices, reactions of competitors, technology, and a host of other internal and external constraints.
Overall Geographic Strategy
The determination of an overall geographic strategy must be dynamic because conditions change, and results do not always conform to expectations. A plan must therefore be flexible enough to let a company: (1) respond to new opportunities and (2) withdraw from less profitable activities. Unfortunately, there is little agreement on a comprehensive theory or technique for optimizing the allocation of resources among countries. Nevertheless, a number of approaches frequently are used.
A firm may expand its international sales by marketing more of its existing product line, by adding products to its line, or by some combination of the two. In this chapter we will assume, for the most part, that the company has decided on its product line or product portfolio. Companies frequently alter their product characteristics to satisfy foreign consumers. But nearly all firms begin with the question "Where can we sell more of our communications equipment?" rather than "What new product can we make in order to maximize sales in the Greek market?"2
in choosing geographic There are two interrelated questions concerning geographic areas of emphasises, a company must de- sis: (i) which markets should be served? (2) Where should production be Clde, located to serve these markets? Frequently the answer to these two questions
• Where to sell
• where to produce De the same, particularly if transportation costs or governmental regula-
tions require local production for serving the chosen market. In other cases, however, the sales and production may be in different countries. For example, Ford serves the French market in vehicles produced primarily in its German production facilities.
The market and production location decisions may be highly interdependent for other reasons as well. For example, a company may have excess production capacity already in place that will influence its relative capabilities of serving different country markets, or a firm may find a given market very attractive but forgo sales there because of an unwillingness to invest in needed production locations.
A firm's international objectives should not be substantially different from those that guide domestic actions. Any foreign operations should complement domestic ones, and vice versa, so that fulfillment of overall company goals is enhanced. Because of each firm's uniqueness, the decisions of where to sell and produce can be quite variable. Firms seeking foreign markets, for example, will have different considerations from those that view foreign operations as a means of acquiring scarce or cheaper resources. Furthermore, even if the objectives and situations were similar, differences in patterns would remain because of varying assumptions about such unknown factors as future costs and prices, reactions of competitors, technology, and a host of other internal and external constraints.
Overall Geographic Strategy
The determination of an overall geographic strategy must be dynamic because conditions change, and results do not always conform to expectations. A plan must therefore be flexible enough to let a company: (1) respond to new opportunities and (2) withdraw from less profitable activities. Unfortunately, there is little agreement on a comprehensive theory or technique for optimizing the allocation of resources among countries. Nevertheless, a number of approaches frequently are used.
A firm may expand its international sales by marketing more of its existing product line, by adding products to its line, or by some combination of the two. In this chapter we will assume, for the most part, that the company has decided on its product line or product portfolio. Companies frequently alter their product characteristics to satisfy foreign consumers. But nearly all firms begin with the question "Where can we sell more of our communications equipment?" rather than "What new product can we make in order to maximize sales in the Greek market?"2
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