International Expansion Proposal Expansion Report: The Report

International Expansion Proposal Expansion Report: The report contains information requested by the CEO regarding the possible expansion and recommendation thereof into either the U.S., Asian or European marketplace. In the interest of gaining the optimal perspective for the most profitable expansion of the company, research was conducted into the economic stability and consumer health of each expansion area. It was found that the United States has the healthiest economy of the three expansion options.

Additionally, the United States has increasing interest and demand for the product and a positive response is feasible. In order to optimize profit and ensure a smooth transition into the United States, importation would be the optimal initial option. The importation would be handled through local businesses who sell the product to the customers and order from our company in advance. Once sales reach an optimal level, it is advisable for the company to pursue a wholly owned subsidiary in the United States.

By this time, the brand will already be established within the country, so building a factory would serve only to lower costs to the consumer and increase sales efficiency. Methodology: In order to obtain a clear picture on the various markets and determine the most favorable market and market style for expansion of our company, statistical research was conducted into the various consumer markets, business laws and overall economic stability.

This methodology allowed for an unbiased view of each possible expansion area and ensured a clear idea of the best market for the product. Introduction: The purpose of this report is to determine the optimal international market for the company and the best route of entry. Research was conducted into all three markets and the best market was determined through factors such as consumer demand, economic health, and intellectual property protection.

Once established, the best course of action for a profitable entry with minimal risk to capital was researched and the conclusions follow. This report presents four recommendations for moving forward with the expansion. Main Body: I. Expansion Of the three options for expansion, the United States is the most favorable for this line of work. The United States offers many features that Asia and Europe cannot offer the company including a stable economy, verifiable increasing consumer spending, demand, and the highest intellectual property protection of any country.

The United States has been the example to the rest of the world for economic stability for nearly the past 100 years. In fact, the rest of the world market still looks to the United States when comparing currency and world wide economic stability. Below is a chart from the United States Bureau of Labor Statistics: As can be seen, the rates of unemployment within the United States are steadily decreasing and there is a steady increase in the Import Price Index.

On the quarterly report, productivity with the United States remains consistent from quarter to quarter. With the economy showing signs of recovery from its recession, it can be concluded that consumers will likely pursue purchases of specialty hobby items. The United States also offers a promising stability regarding consumer spending resulting in an optimal customer base. The following chart reflects the quarterly gross domestic product for the United States for the years 2008 through 2011. As can be seen, the current consumer spending is increasing.

In fact, consumer spending jumped an entire percent in the last quarter of 2011. Such a positive outlook presents the United States as an economy where consumers will embrace the product. The outlook in the United States also looks promising because of the demand for the product. According to the National Oceanic and Atmospheric Administration, over half of the American population lives within 50 miles of a costal area. There are only a handful of American surfski manufacturers and most outsource to China for production resulting in a poor quality product.

Surfski has become so popular in America that there is now an annual U.S. Surfski championship in San Francisco. Additionally, the company's manufacturing technique is so much cheaper than even the outsourced production price that the company can easily compete within the United States marketplace. With the industry only growing in the United States, the potential for successful sales is great. The final reason for seeking expansion into the United States is the intellectual property protection.

While the European Union offers some protection, patents must be obtained for each individual country. In Asia, intellectual property rights are not readily protected and laws are not stringently enforced. The United States is among the most stringent at protecting patents for producers within the country. Given the company's novel material patents, the United States would provide more than adequate protection that is not available in European or Asian countries. II. Mode of Entry The company is considering three different models for expansion into a foreign marketplace.

The first option is licensing the production rights to an existing company within the United States. While there are existing surfski companies, licensing would most likely not be embraced by these companies as they tend to use traditional methods of manufacturing. Additionally, licensing would not provide optimal profit for our company. The second option for expansion into the United States would be export from Australia to the United States. According to the U.S. Census Bureau, in the United States, the total value of imports in 2011 was 47.8 billion dollars.

Furthermore, the amount of imports into the country is predicted to only continue rising. Under current United States law, the United States adjusts prices of imports based on the chain-weight value of the dollar. This would ensure that our company receives an accurate payment for all imports. The most feasible means of importing the company's specialty product into the United States would be through orders from various retailers.

The product is already known in the world of surfski, and there are numerous retailers within the United States that would carry the product. This option would require setting order contracts and credit amounts with the retailers as well as proper educational material for informing the consumer about the product. The final option would be to establish a wholly owned subsidiary within the United States.

In order to do this, the company would need to file for a United States business, obtain trademarks through the United States office, establish an account with the Internal Revenue Service, and procure liability insurance. On the up side,.