The activity of business expansion is a strategic move especially when the outcome(s) outweigh the challenges of the same. Religion or even international expansion is coupled with challenges that require careful consideration and attention to eliminate or minimize, thus enabling effective expansion that is eventually profitable. If a multi-national company in America were to expand its business activities into China, it would experience various challenges because of various elements that enable businesses to operate profitably such as restrictions and regulations by foreign markets. Taking, for instance, McDonald, an America multinational corporation expanding its business activities into China, it would face a number of challenges.
The first issue McDonald's may face during its expansion could be the issue of Red Tape in China, which results in time-consuming processes necessary to conduct a business operation in the country. A second challenge might be resource-related, concerning inadequate supply since there is the need to familiarize with the market in China. As a result, McDonald's may have to rely on mainland supply, which may result in other challenges such as credibility issues, thus lack of market and decreased demand for the corporation’s products (Morrison, 2008). For example, in 2015, McDonald suffered food safety concern issues because of safety regulations in China. During that period, it was revealed McDonald's was using a mainland supplier that sold expired meat, which was relabeled.
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Lastly, another challenge that McDonald's may face is that of communication due to the difference in language. This may lead to the development of language barrier, which negatively influences the performance of business especially during expansion (Morrison, 2008). One more possible challenge is that of acquiring human resource since it is historically among the biggest challenges western multi-national corporations face in China. In China, employees are accustomed to clearly defined roles at work, thus hierarchal orders, unlike in the U.S. where there is a delegation of responsibility and flexibility regarding lines of authority.
Reference
Morrison, J. (2008). International Business . Palgrave Macmillan.
