Essay: Motivations for Internationalization

Sample Essay

Internationalization is one of the major elements of growth for any enterprise or organization where companies take advantage of the global business environment involving various countries in the world. There are various factors that motivate companies to invest internationally and expand business from local to international levels. These factors include exploring new markets and taking advantage of growth patterns of certain industries in various countries. The Shangri-La hotel also focuses on new markets where there is good potential for hotels and resorts.

Take the examples of India, U.A.E, Australia, Thailand and Maldives. These markets are becoming tourist destinations for individuals from all around the world. These countries are not only tourist destinations but also offer attractive environment for businesses like hotels and resorts. Another motivation for the hotel to internationalize is the lower cost of doing businesses in various countries and high level of revenues the hotel can generate from those areas. The foreign exchange a company earns by doing business abroad is also one of the causes of internationalization. Various countries also offer lower tax rates in various specific industries such as hotels, education and other industries.

Shangri-La has gained from opening hotels in new locations both financially and in terms of goodwill. As the company opens new hotels and resorts in various locations, it draws closer to becoming a member of the highly reputed hotel chains of the world. The hotel has to keep up with the challenges being faced in the new locations both regarding the culture of the local populace and catering to the tourists flocking to these locations. The hotel has not only opened in various locations but the plans for extending to newer location and increasing the number of hotels in the present international locations identifies the hotel management’s ideology regarding internationalization. As the company benefits in terms of revenue and status from the international locations, its local popularity grows as well as Shangri-La now signifies a multinational hotel resort chain with five star hotels and resorts at various international locations catering to the needs of a diverse clientele base.

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