One of the main threats in the global expansion process is the multiple multinational companies. To fulfill the ToolsCorp expansion plan, it is necessary to consider that the market is competitive with international companies with a well-functioning distribution network and a global market space. This competition could create some barriers to entry for ToolsCorp. Therefore, ToolsCorp’s primary focus in addressing this issue is broader marketing campaigns to increase brand awareness among other companies. The advertising campaign, broadcast on television and the Internet, will help the corporation solve this problem.
It is also necessary to consider the fact that there are government rules that govern the activities of all foreign markets. A peculiarity is that such regulations are constantly changing, which prevents many international organizations from actively managing their actions in a particular region (Stern et al. 121). However, this threat can be mitigated by good relations with the government. To accomplish this goal, ToolsCorp needs to establish a relationship of trust with the government and maintain transparent accounting records to avoid problems and prohibitions.
The world market is also characterized by instability, especially in the context of fluctuating exchange rates and regional laws or issued regulations. Therefore, ToolsCorp needs to develop a strategy for narrowing and enforcing specific regions. Moreover, to keep profits in the face of changes in the exchange rate, the company needs to convert its net profit into world currency. ToolsCorp also faces the threat of fluctuations in production costs due to changes in raw material or labor prices. To do this, it is necessary to conclude a long-term contract in a fixed amount. This will help avoid sharp fluctuations in the market and their impact on the company’s bottom line.
Reference
Stern, Nicholas H., et al. (2020). Strategy, investment and policy for a strong and sustainable recovery: an action plan. Centre for Economic Performance, London School of Economics and Political Science.