Affiliations: OPUS College of Business, University of St. Thomas,
Mail # TMH 343, 1000 Lasalle Avenue, Minneapolis, MN 55403-2005, USA. Tel.:
+1 651 962 4350; Fax: +1 651 962 4710; E-mail: skumar@stthomas.edu
Abstract: The paper discusses motivations for international business expansion
and its benefits to support an organization's global market system integration
efforts. Combinations of domestic business diversification and international
expansion that yield a successful growth strategy are assessed. The research
considers an export substitution effect created by the elimination of tariffs
and the reduction of non-tariff barriers. The study indicates pitfalls of
overexpansion and assesses unfocused development as well as the socio-economic
impact of less developed countries inviting foreign direct investment. A
geographic survey of the global market for entry and expansion opportunity is
presented and the generalized differences are identified between market
structures and business cultures within US, Europe and Asia. Mexican and Asian
liquidity crises are reviewed to show macro-economic variables that determine
long-term viability of expansion strategy. The US domestic automotive market is
assessed in terms of competitive pressures from Japanese and Korean automobile
manufacturers' successful expansion into the US market and it is qualified with
an assessment strategy employed by the entrants quantifying success and
expected success using game theory models.
Keywords: Foreign market expansion, global system integration, business culture, macro-economic variables, automotive industry drivers, industrial strategy, foreign direct investment, global competition, organization growth