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Westfield Holdings Limited is an Australian publicly listed company that continues to experience extraordinary growth in the international marketplace This report will incorporate the companys reasons for expansion onto the international stage its methods of expansion and its strategies used to manage its operations that envelop 87 shopping centers in four countries Reasons for Expansion In critically examining Westfields global strategies it is important to reflect on the broader reasons why many Australian businesses are increasingly pursuing a global strategy The reasons for their expanding overseas include To find new markets and increase sales To achieve economies of scale from a larger operation To cushion the effects of fluctuations in the domestic economic cycle To take advantage of regulatory differences or To minimise tax Although not all of the above reasons are significant in Westfields strategies to expand globally some certainly can be considered significant For example Australias comparatively small market with a population of less than 20 million represents limited opportunities for Westfield to expand its shopping centre creation or management domestically By limiting itself to Australia Westfield would have missed the opportunities to take advantage of changing demand in new and emerging markets and thereby increase its sales that would flow from successful entry into overseas markets Westfields global expansion strategy also expands their income generating potential For example with each additional development Westfield commands development fees of 3 of total development cost leasing fees of 10 of the first years income of each specialty store and property management fees of 5 of gross income Expanding was also essential to Westfield in order to remain competitive By operating solely in Australia it would be unable to achieve the economies of scale that are typically enjoyed by oversea competitors The nature of many businesses means that the bigger their scale of operations the more they can spread the costs in order to achieve higher profits Methods of
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