Reference no: EM133176724

Please respond to discussion below: 

There are many advantages and disadvantages associated with a firm expanding into international markets. One advantage is an increase in market size, increasing the size of potential markets for a firm's products or services. Another advantage of international expansion is arbitrage opportunities. Taking advantage of arbitrage opportunities is buying a product cheap in one place and selling the same product where there is a higher price. Another great advantage of international expansion is enhancing a product's growth potential, selling a product in a region with higher demand (Dess et al,2021). This method sometimes saves and revives struggling companies. However, there are also four main disadvantages of expanding to international markets. First Political risks include social unrest, military tension, and violent conflict. Secondly, economic risk, arises from laws associated with property rights in the new international markets. Companies lose billions entering foreign markets due to counterfeiting the intellectual property rights of firms.  Next currency risks, are a disadvantage of expanding into international markets because a small change in the exchange rate results in a big difference in cost of production or net profit. Lastly, management risks are a disadvantage because cultures, customs, language, and customer preferences are different across countries. Making it difficult for managers to respond appropriately in situations in the workplace (Dess et al., 2021).