Question

Business Expansion Plan (Scenario)

As a business expansion director, Shana's goal is to scout potential locations for her company's planned expansion to other countries. There are many options, some of which include maintaining the business's head office in the United States. Other options send company representatives to foreign operations when necessary, or establishing separate operation facilities abroad and hiring locals as managers.

Q: If Shana's company decides to open operations in France but maintain company management in the United States, it would be considered a...

A. Centralized Expansion Model
B. Decentralized Expansion Model
C. Hybrid Expansion Model
D. Globalized Expansion Model

Answer 1

Shana's company's choice to open operations in France while keeping management in the United States is a Centralized Expansion Model, with strategic decisions centralized at headquarters.

Step-by-step explanation:

If Shana's company decides to open operations in France but maintain company management in the United States, it would be considered a Centralized Expansion Model. In this model, the key decisions and management operations are kept at the headquarters, in this case, in the United States, even as the company expands internationally. This approach allows for a uniform management style and central control over the global operations.

Expansion strategies vary depending on the company's goals, resources, and the business environment of the target market. In Shana's scenario, the use of representatives on an as-needed basis to facilitate operations in France suggests a central command structure with some degree of local oversight, inherent in a centralized expansion. This is distinct from a decentralized model, where local branches have more autonomy and management power.

For global expansion, companies must carefully consider geography to minimize costly mistakes and maximize market opportunities, as geographic factors play a crucial role in the success of the expansion.