Foreign markets can be very attractive to a business looking for new customers, especially when its home market is becoming saturated. Such an expansion, however, needs to be thoroughly researched and carefully planned to ensure that the timing is right. To begin with, a business needs to have successful products or services close to home. It is essential to proceed from a strong financial position if you want to develop markets abroad. The decision on which market to enter, lies not only within the potential of a company to increase its profitability, but also the risks associated with doing business in that specific country.
Here is the example. Dell computers was one the pioneers of online ordering and now Dell is preparing to work at difficult Latin American market. Soon Dell will start making computers at a new factory in Eldorado, Brazil. It would be its first manufacturing facility in South America. Dell hopes to satisfy a lot of markets with this new strategy.
Dell has to deal with the problems in that area. Between them are bad road and air network, complicated logistics system, unpredictable government and consumers. But Dell cannot ignore South American market much longer. Dell is not the first company that came to that market. Many other multinational companies have operated in region main countries for a decade and formed one integrated market.
Dell decided to locate manufacturing in Brazil because it is the biggest market in region and government there gives incentives to develop the technology industries. But still Dell can do nothing with internal transport network in Brazil and bureaucracy in neighbour countries.