In terms of distribution and related costs, we need to consider the fact that the entry costs in the new country (including here distribution and administrative costs) may be quite high. Additionally, each country has its own specifics related to distribution networks (Japan is a good example in this sense). International expansion needs to consider any issues related to cultural differences and to problems that may occur due to the need to expand to another country.

So, evaluating those said previously, international expansion, through the possibility to increase the targeted market, through an increased perception at a global level, even through economies of scale and lower costs that may often occur in this case, is still a move to be wisely and thoroughly considered, because the difficulties associated with market expansion abroad may prove costly for the company.

3. In my opinion, the company should probably start in a less competitive market. There is no use attempting from the very beginning to penetrate the French market, for example. In this sense, a good suggestion would be one of the countries in Eastern Europe. The choice has several motivations. First of all, all the countries here have joined or will soon be joining (Romania and Bulgaria in 2007) the European Union. This means that there is a solid legislation set that will ease some of the implementation and expansion procedures. Second of all, the purchasing power is constantly on the rise in these countries. Certainly, they are not yet at EU levels, nevertheless, especially in a market such as the one Sara Lee operates in, this is not necessarily so important. Third of all, these countries have a significant potential for future expansion and growth and this will imply a long-term process for Sara Lee.