Penelope Manzo

Colorado Technical University

ECON616 Applied Managerial Economics
Phase 5 DB Intl Expansion Considerations
Prof. Janet Hunter
George approaches me to let me know that he just got out of a committee meeting with
the board members and have considered expanding internationally. There are some factors to
determine before any decisions could be made. Consider five factors to include the pros, cons,
and risk. Once that is completed, he would like for me to give a recommendation if AutoEdge
should or should not expand the product line to automotive manufacturing companies in other
countries. (CTU course materials, 2015) There are different factors that have to be determined
and analyzed to be prepared for the decision of the global expansion. It is important for
AutoEdge to understand why the different factors have an influence to operating globally. The
five key factors that we will cover are the social, ethical, economic, political and legal. The
success or failure of any business will be influenced greatly by these factors. The risks involved
for AutoEdge would be economic conditions, fluctuations, competition and expenses. (Keat,
2013)
What are the ethical factors that influence this decision? All countries have their own
ethical system that usually includes civil liberties, employment procedures, conservation and the
standards to global business. The ethical factors in all countries have the clear understanding of
the behaviors that are acceptable or not. The companys communications contribute to the ethical
climate of protocols, marketing techniques and mission statements. (Mack, n.d.) It is clearly
laid out what behaviors are prohibited and what is discouraged. It would be considered to reward
those with ethical behaviors and discipline those who are unethical. (Mack, n.d.)
The social factors are what relate to the customers perception of the ideal business. The
factors impact the company with the environment, views, lifestyles, values and populations. The
cultural aspects also include the religion, social organizations including law and politics. The
social factors include the gesture of someones hand or even their facial expressions. They all
differ from country to country. (Kozenkow, n.d.) There has to be enough research done to know
what is considered to be appropriate or not. It would be wise to look into the trends of the society
in the area to figure out the buying patterns. Every location will have its own valuable resource.
(Keat, 2013)
The legal factors are carried out in every country as well, and all employees have to obey
to the rules. These factors are influenced by the things needed to hold the business together.
AutoEdge will have to update any changes to the laws in South Korea which could be vital to
their business success. They will have to set guidelines associated with expenses before making
the global expansion. (Keat, 2013) Every country has their own degree of regulations and control
for all industries. They have the decision of how much to charge for the items purchased within
the legal rules of South Korea. AutoEdge will have to look into the stability of the governments
and politics to know if any problems that could arise while doing any business there. (Keat,
2013)

The economic factor focuses on the identity and fulfilling of the customers needs in the
market. The factors that are affected are usually the customers confidence, interest rates,
employment and inflation. The economy sees the fluctuations in the increases, decreases and
demands in a product and price. (Keat, 2013) The advantages with the global expansion are the
high demand, new markets, growth, potential profit, and opportunities. The disadvantages are the
high cost, no market or demand, varying standards, competition and language barriers. (Keefer,
2014)
Part 2 of discussion
This class has taught me to better understand the economics in a business. The interesting issues
were learning the elasticity of demand and the various marketing structures. The economies of
scale and the occurrence they have.
The SWOT analysis was the most interesting topic in this class. It really shows what a business
has to know in any situation, not just for globalization. The strengths, weaknesses, opportunities
and threats are vital for a business to really understand. It gives a clear understanding of the
issues internally and externally.
The participation in the discussion boards, in all the DBs is vital for all of us to have a clear
understanding of the topics. Everyone has their own opinions, which can be an eye opener for
others. It gives us a better understanding of the topics involved.

References:
CTU assignment details retrieved from school website for Phase 5 Int'l Expansion
Considerations
Keat, P. G. Young, P. K. Y., & Erfle, S. E. (2013). Managerial Economics: Economic Tools for
Today's Decision Makers. 7th Edition. Pearson Publishing Co.
Keefer, A. (n.d.). Pros & Cons of a Global Marketing Strategy. Retrieved August 6, 2015, from
http://smallbusiness.chron.com/pros-cons-global-marketing-strategy-40456.html
Kozenkow, J. (n.d.). Sociocultural Factors That Affect Marketing. Retrieved August 6, 2015,
from http://yourbusiness.azcentral.com/sociocultural-factors-affect-marketing-4471.html
Mack, S. (n.d.). What Ethical Factors Must Be Taken Into Account in Organizations? Retrieved
August 6, 2015, from http://smallbusiness.chron.com/ethical-factors-must-taken-accountorganizations-20666.html