When expanding to foreign countries, Meadwestvaco needs to also research these political factors, as they may impact heavily upon the types of materials as well as fees and consequent income. Some countries also have competition clauses in order to avoid that foreign companies compete too strongly with domestic companies of the same nature. Meadwestvaco need to take these factors into account in order to ensure that profitable business is possible in the specific country.
There are many benefits associated with understanding buyers and markets in the foreign market. Meadwestvaco is already familiar with this principle, as can be demonstrated by its lucrative presence in China. Understanding cultural symbols, for example, has the advantage of creating a positive image (or avoid negative connotations) in the mind of the foreign buyer. Creating positive image via the active use of cultural symbols can play a large part towards driving sales.
The advantage of understanding economic infrastructure will help Meadwestvaco to quantify its operations in the foreign country.
It may be necessary to invest in telecommunications and transport setups in order to make the foreign business viable in terms of revenue.
Combined with this, an understanding of trade regulations also serves as a quantifying factor. Possible fees, for example, would impact to some degree upon the quantity of products that can be brought into the country, and also determine the profit that is possible from these. The advantage here is that countries with trade regulations that are too strict and imply a lack of adequate profit can be avoided in favor of those that are not. In this way, costly mistakes can be avoided.
When entering the foreign market, it is vital that the company research exactly the cultural, economic and political factors involved, as well as how these relate to its specific product line. Such research is.