Globalisation Report - Westfield Holdings

Westfield Holdings Limited is an Australian publicly listed company that continues to experience odd 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 spherical strategies, it is important to reflect on the broader reasons why umpteen Australian businesses are increasingly pursuing a global strategy. The reasons for their expanding overseas include:

üTo find new markets and increase sales

üTo action economies of scale from a larger operation

üTo cushion the effects of fluctuations in the domestic economic cycle

üTo get down advantage of regulatory differences, or

üTo understate 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 circumspection domestically. By limiting itself to Australia, Westfield would have missed the opportunities to take advantage of changing demand in new and emerge markets and thereby increase its sales that would flow from successful access into overseas markets.

Westfields global expansion strategy also expands their income generating potential. For example, with separately 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 format 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...

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