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Effect of globalization in international business
Globalization and its impact on business strategies
Globalization and its impact on business strategies
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Literature Review and Hypothesis Development Studies related to firm’s expansion in global markets have received increasing attention at both empirical and conceptual levels. Numerous conceptual frame works and studies have been put frontward outlining firm’s choice on the way to establish internationalization procedure Whitelock (2002) and Andersen (1997). In prior studies related to the strategic management and international business have investigated a lot about the performance inference of the globally diversification strategies. However there is less work done on the performance inference of the globalization strategies related to the entrepreneurship and firm related literature. It has been empirically tested and argued by several researchers that better firms performance is related with the better level of global diversification for example Daniels and Bracker (1989), Tallman and Li (1996), Grant (1987) and Kim, Hwang and Burgers (1993). Barringer and Greening (1998) argued that one of the most important paths for the firm’s growth is geographic expansion. This type of growth strategy is relatively much important for SMEs whose scope has been confined geographically. According to Zahra, Ireland, and Hitt, (2000) the larger volume of growth and production of firms can be achieved by expanding customer bases by going into new markets. Furthermore in different geographic areas of the world, markets prevails different conditions. Firms can get high rate of return on their assets and can take advantage on market imperfection by leveraging their assets in dissimilar markets. SMEs will have to expand across the border markets to get better opportunities and better rate of returns to their assets. Milinaric (2010) has focuse... ... middle of paper ... ...ee hypotheses were developed through extensive literature review. H1: Location specific factors are positively related with firm’s foreign market performance. H2: Firm specific factors are positively related with firm’s foreign market performance. H3: Owner specific factors are positively related with firm’s foreign market performance. Theoretical Framework FLO-FE model Measurement Before conducting regression analyses, data reduction was performed for factor analysis. The Firm specific factors, Location specific factors and Owner specific factors were measured on 5 point Liker scale. Ranking started from “1= strongly disagree” to “5= strongly agree. The responses to the Foreign entry performance questions ranged from “1=Much Worse” to “5=Much better”. To determine the internal reliability of the variables, cronbach’s alpha was run.
The rise in globalization over the last few decades has helped facilitate and encourage corporations to expand into international markets. This paper will review the five common international expansion entry modes, and the pros and cons of each method. Finally, my employer is in the technology industry and I will breakdown and recommend which entry mode would work best for international expansion.
Recent years have witnessed the surging of Chinese manufacturers as China has become the “world’s local factory”. Galanz Group, the Guangdong based home appliances manufacturer, has also evolved globally with China’s international growth. Since its inception in 1987 as a textile company , Galanz has been developing constantly and rapidly taping into the global market. The company quickly gained significant domestic market share as it started to focus on its areas of expertise in the microwave business sector on 1992. Since then Galanz has become the leading company in microwave-oven business, acquiring 25.1% domestic market share on 1995 and expanded into 61.4% on 1998 .
Nowadays with the development of technology especially after the appearance of internet, communications between people become more convenient and frequent. When their relationships become increasingly close, globalization has turned into the trend of the age. Facing such a good opportunity of expanding market, acquiring more profit and resources, various international firms started to spring out. ‘International firms usually mean companies who do business between two or more countries’ (John D. Daniels, 2013). At present, they have comprised a large and growing portion of the world business. To be successful in fierce global competition, international firms have to make many changes actively to deal with different conditions. Changes on corporate governance, internal organization and foreign entry strategy are three major parts of them. However, no matter how many changes have been made, the implication of culture and institution from home country where they started from still exist. And host country culture and institutions also have implications to the choice of foreign entry strategy. To prove this, the paper use famous international company Haier as an example to analyze implications of culture and institutions from home country China and host country America.
Firms exist with the purpose of create and deliver economic value (Bensaco et al 2010, p. 365); therefore, business that create better economic value than its competitors will attain an advantage position in market place. Companies might try to improve its sales (profit) through domestic expansion, product diversification or by internationalisation; this report will focus on the reasons of espressamente Illy to expand internationally; additionally, its sources of competitive advantage and, the analysis of three markets in which company want to participate.
When it comes to doing business internationally the decision making is more complex. There are many interactions between each country that need to be addressed. In order for a business to be successful in the international market they need to examine and analyze all the facets of their company. They need
According to Teagarden & Cai (2009) Chinese companies have expanded abroad for three reasons. Firstly, ‘to secure natural resources to satisfy the demand of their home costumers for raw and fuel; secondly to identify and secure foreign technology and know-how; finally, to escape home market saturation and ruthless price wars’ (Teagarden & Cai, 2009: 73). In addition, Teagarden & Cai (2009) noted that in order to become multinational firms, Chinese companies followed a pattern of four phases:
Incorporation of SMEs and International companies to better define, penetrate and gain access to both local and international
We all know that comapanies go international for many reasons but always typical goal is comapny growth and expantions. When a company searches for new interesting markets abroad and also hires international employees, using well designed international strategy can for sure expand business on foreign markets. Internalization strategy of companies is now possible because is no problem to manage business by phone or e-mail. There is also no problem to travel by plane from Europe to Asia in few hours what was not possible in past.
New Geographical markets: this involves selling outside the region or a country and offering them same existing product. Expanding into new market place with the same existing product is a very effective way to grow the business.
These factors encourage the SME to seek a non EU market and a central location where it can gain advantage from a lot of
In this report, discussions aim to assist an Irish SME to optimise its analysis and assortment of the BRICS countries (Brazil, Russia, India, China, and South Africa) - the developing or newly industrialised nations. The term ‘company’ herein mainly refers to small and medium enterprises rather than the large international enterprises. Besides, the exporting aspect is the main concern in this context. Furthermore, the entry mode to each market is presumed to be the subsequent decision of a company after identifying the market. Thus, it would not be covered in this report.
Oesterie, M. J., Richta, H. N., & Fisch, J. H. (2012). The influence of ownership structure on internationalization. International Business Review, 22(1), 187-201.
The economy of scale and economy of scope needs to diversification. Diversifying significantly helps in growing a firm’s ability to grow more rapidly. The main reason for any firm to diversify is survival. Eg- a company sells heating pad it will do good business during winters and will also have to cover up for summer dur...
Generally, the success of global companies relies on many factors, including creativity, innovation, and quality in services or
The marketing team of International Consultants Inc. (ICI) began an analysis of the feasibility of expanding the sales of American Training Incorporated (ATI) products into international markets. Mexico and Canada appeared to be the logical initial markets; however, the study showed that other Latin American country should also be considered further