IntroductionFor a company that is performing well, expansion is usually the best way to increase the revenue. Venturing into different countries allows foreign investors to enjoy various benefits that come along with expansion. These include tax waivers and relief for the first few years the company starts its business. Considering economies of scale, a company could save billions of shillings if they are exempted from tax payment for a period of time. This is because such privileges add to the cost efficiency of the company and therefore shipping of plant and equipment as well as raw materials becomes affordable.
Australian Mechanical Engineering Company is planning to expand its operational boundaries in England and China. This is a great move and it is likely to cause a great surge upwards in the company’s revenue. China is known to have a population of over one billion people and the backbone of the economy is business. Most of the people in business always monitor their efficiency levels. The “Evolute” is a product whose main aim is to save water therefore most of the Chinese businessmen will consider installing it in the houses, buildings and business premises to reduce water wastage.
On the other hand, people in England are very conscious of their spending and they are always open to new ways of reducing their bills which consume most of their hard earned income. Introducing the “Evolute” which is a once for all cost that will reduce the water bills forever, is an idea that is likely to be embraced easily. The Australian Mechanical Engineering Company stands a great chance of moving their product with ease.
However, there are a number of factors to consider in terms of risk and opportunities as well as business legislation in both destinations. Focus on the destinationsBusiness Opportunity in EnglandEngland is considered as one of the most stable markets in the world. It has a mixed economy where a company has a chance to determine its prices but at some point there checks and balances to prevent consumer exploitation and monopolies. Although the supply and demand also control the prices, the market is fair (Great Britain Parliament et. al 2009).
The currency used in England is arguably among the greatest currencies in the world facing competition from the Swiss Franc which has dominated the chart for a while. Since the Australian currency might be exchanging for a lower price to the pound, England poses a greener location for an investment since the Australian Mechanical Engineering Company can adjust the price slightly upwards to match the competition in the region. This could translate into greater profit since at the lower selling price, the company stills makes a sustainable profit.
England’s capital London is known to be a hub of manufacturing industry and tourism is also a considerable revenue producer in the region. This is an indicator that there could be very many businesses that could be willing to invest in the “Evolute” to cut the water consumption costs in the region. Licensing in England is a very creative approach to business since it exposes the company management to the managerial authorities which gives the Australian Mechanical Engineering Company directors a chance to negotiate for relief and exemptions as well as grace periods as the business kicks off.