What Are the External Factors Companies Must Face When Deciding to Expand Overseas?
Introduction
Australian businesses have expanded overseas for the last few decades. Whether they are successful at doing so or not depends on many external environmental factors surrounding them in the foreign country. For Sumo Salads, which is an Australian brand that was established back in 2003 by a group of people who wanted to shift the lifestyle of Australians to a healthier alternative, they must understand how these factors will have a great influence on them if they were to expand to the United States of America (USA). Sumo Salads is currently present in Australia, New Zealand, London and Dubai as of the moment (Sumo Salads, 2012). These countries were fast to pick up on the fad of healthy eating due to the world’s increasing obesity rate. Because of this, by expanding Sumo Salads into one of the world’s highest obesity rated countries, Sumo Salads can be in for another success. External factors that they would face would be legal factors, social influences and trends, competition and the effect of seasonal factors.
Legal Factor
The legal system is different in every country so Sumo Salads must research this aspect well if they were to expand into the USA. They need to have a well and thorough understanding of the commercial law in the USA, which regulates employment, advertising, workplace safety and health, as well as food safety. This step can be quite hard so Sumo Salads need to determine if they would need to seek help from professionals in that field. Since they would be operating in the USA, they need to hire USA residents. In Australia, our national minimum wage is $15.51 while in USA the minimum wage is $7.25 (Fairwork, 2012). This can be beneficial for the expansion because since labour costs will be cheaper, Sumo Salads can make a larger profit out of the sales compared to Australia if they become successful.
Like in most countries, there are laws that regulate the well being of the workers in a business as well. The presence of a
Australian businesses have expanded overseas for the last few decades. Whether they are successful at doing so or not depends on many external environmental factors surrounding them in the foreign country. For Sumo Salads, which is an Australian brand that was established back in 2003 by a group of people who wanted to shift the lifestyle of Australians to a healthier alternative, they must understand how these factors will have a great influence on them if they were to expand to the United States of America (USA). Sumo Salads is currently present in Australia, New Zealand, London and Dubai as of the moment (Sumo Salads, 2012). These countries were fast to pick up on the fad of healthy eating due to the world’s increasing obesity rate. Because of this, by expanding Sumo Salads into one of the world’s highest obesity rated countries, Sumo Salads can be in for another success. External factors that they would face would be legal factors, social influences and trends, competition and the effect of seasonal factors.
Legal Factor
The legal system is different in every country so Sumo Salads must research this aspect well if they were to expand into the USA. They need to have a well and thorough understanding of the commercial law in the USA, which regulates employment, advertising, workplace safety and health, as well as food safety. This step can be quite hard so Sumo Salads need to determine if they would need to seek help from professionals in that field. Since they would be operating in the USA, they need to hire USA residents. In Australia, our national minimum wage is $15.51 while in USA the minimum wage is $7.25 (Fairwork, 2012). This can be beneficial for the expansion because since labour costs will be cheaper, Sumo Salads can make a larger profit out of the sales compared to Australia if they become successful.
Like in most countries, there are laws that regulate the well being of the workers in a business as well. The presence of a