International expansion is obviously a necessary and useful step in the life of any company. First of all, international expansion gives the possibility for the company to expand its clientele and enlarge its future potential for growth. Basically speaking, it would be a chance for Sara Lee to increase its revenues. On the other hand, revenues are less important if they are not counterbalanced by low costs. The moment seems right, because Sara Lee is already a bug name on the internal market, a market which is already quite saturated and international expansion would seem the right choice in terms of looking for other markets where the company can develop anew.
In order to be able to answer this question, in terms of costs we need to take into consideration two issues: the cost of labor and the cost of distribution (and any related costs). In terms of labor costs,...
On the other hand, we need to make an important observation here, something which often comes into discussion when referring to labor costs: relocation would only lower the rate with which the labor is paid, not necessarily the overall labor costs. This is a productivity-related discussion: if the new, lower paid workforce is producing much less than in the country of origin, then Sara Lee could find itself in a situation where relocation was actually less economical than perceived. In this sense, the choice of country is important, because the new workforce needs to be professionally competitive so that efficiency and productivity can remain at the same levels.
In terms of distribution and…
