Sample Thesis Paper
International diversification carries with it significant advantages. Taking into account the obvious advantages in terms of the increased market size and a higher return on investment, there are also other advantages that help the company take down its per unit costs and hence increase profit margins. These accrue from taking advantage of economies of scale to drop down fixed costs or per unit costs. This is further aided by the domestic incentives that the other countries may provide to aid their own economies which would give the expanding firm a comparative advantage.
The development of international business level strategies however does depend on some factors. One of the chief is the amount of risk averseness of the management who may or may not be willing to take such a big step requiring possibly high capital expenditure. There is also the degree of environmental scanning performed by the firm and the degree of planning formality used to guide the planning process. Finally a crucial element in the decision to go international is the amount of munificence in the domestic industry environment.