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Marketing and Global Expansion

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Why is it important to understand the political and economic history of a region when expanding into markets in that region? How do you determine an appropriate market, size and growth potential for global expansion?

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https://brainmass.com/business/international-business-risk/marketing-and-global-expansion-52677

Solution Summary

This solution examines why it is important to understand the political and economic history of a region when expanding into markets in that region. It also explains methods to help determine an appropriate market, size and growth potential for global expansion. Supplemented with a highly informative article on the drivers of global expansion and a detailed description of global expansion with charts and step-by-step strategies to consider.

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Global Expansion: Decision Making with Uncertainty

You're the manager of global opportunities for a U.S. manufacturer, who is considering expanding sales into Europe. Your market research has identified three potential market opportunities: England, France and Germany.

If you enter the English market, you have a .5 chance of big success (selling 100,000 units at a per-unit profit of $8), a .3 chance of moderate success (selling 60,000 units at a per-unit profit of $6), and a .2 chance of failure (selling nothing).

If you enter the French market, you have a .4 chance of big success (selling 120,000 units at a per-unit profit of $9), a .4 chance of moderate success (selling 50,000 units at a per-unit profit of $6), and a .2 chance of failure (selling nothing).

If you enter the German market, you have a .2 chance of huge success (selling 150,000 units at a per-unit of $10), a .5 chance of moderate success (selling 70,000 units at a per-unit profit of $6), and a .3 chance of failure (selling nothing).

a)If you can enter only market, and the cost of entering the market (regardless of which market you select) is $250,000, should you enter one of the European markets?

b)If so, which one?

c)If you enter, what is your expected profit?

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