Global Firm Analysis

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In general there is a liability of foreignness for a company that tries to expand to another country. However, if a company has a particular competitive strength that can "travel" well, it might be better able to adjust in a new country. Liability of foreignness consists of these main factors:

  1. There is less knowledge about market conditions in country YY
  2. Difference in laws
  3. Differences in cultures
  4. Differences in language
  5. The increased cost of communicating at a distance