In theory, economies can grow even more efficiently and become competitive economic participants more easily. At that point currency and knowledge can enter to the home country from foreign. These can raise the employment rate, and can lead to growth in GDP. These are the receiving for the government. FDI gives opportunity to company to growth and expand their business which means greater
First of all, it is a chance for a company to expand its current market. Because of the huge population around the world, advertising products and services overseas can create and attract a larger size of consumers as well as increasing profits (Bradley, n.d.). Another benefit brought by international marketing is that firms can minimize operating costs (Bradley, n.d.). For example, cheaper costs such as labor cost and advertising cost, or even tax in some host countries are bargains for companies aiming to target the international market. As a result, costs are minimized while profits are maximized as much as possible.
According to Daniels, Radebaugh, and Sullivan most companies engage in international business to expand sales, acquire resources, and minimize risk. When a company wants to expands sales it also expands its competitive realm. The company steps outside the boundaries of its origin to maximize profits and also use it as a balancing factor. For example, if sales are down domestically and sales are up internationally the company will not be at a loss. They actually create a competitive advantage to those companies who limit itself to domestic business only.
Growing integration of international markets leads to growth of competition on a worldwide scale, which implies the adoption of a global perspective in business strategies. Due to this, companies seek a global strategy due to the benefits it provides. The four main benefits Yip mentions in his book are: cost reduction, more quality, more client preference, more competitive effectiveness. From the information collected about both types of strategies, we can conclude that both strategies are good for a company, and both are used widely. Regional strategies depend much on cultural and contextual factors within a country, while a global strategy does not face such problems since it is especially designed to not face them.
The technological progress is an indispensable part for the economy globalization. Because the rapid development of technological in information dissemination and communication, it not only reduce the cost of commodity circulation and create more export opportunities, but also exploit some new products and service in the world markets (Hibbert, 2000). The improvement of technology creates the conditions for the globalization of production, which is allowed to produce many goods in different countries. Therefore, some developing countries can benefit from significant amount of foreign direct investment form develop countries. The foreign company can corporate with local company to develop product and those multinational companies can exploit local markets.
The reason is that International trade brings various benefits to both business firms and countries: First of all, International trade boosts development and generates growth by allowing exchanging knowledge, standards, and best practices of skills and techniques globally and using the best that fits well. Moreover, Country’s Shortage and high costs become avoidable. Scarcity in availability of raw materials or expensive labor force in local market is exempted. Obtaining the raw materials at relatively lower price than local market can reduce the cost of doing business. In case of illiquid Local markets clients can benefit by Easy access of acquiring financing by entering into highly li... ... middle of paper ... ... terms and condition which may cause future disputes or Documentation risk • Acknowledge the buyers culture and accept cultural differences to keep friendly based business partner.
Globalisation vs Regionalism By-Devika Rajeev Introduction The advent of international trade has helped economies all over the world. Be it a developed country which is looking for the best option in terms of skilled and unskilled labour, natural resources etc, or a developing country looking to increase employment opportunities, investments etc. Not only has this helped economies, but has helped to share popular culture around the globe. This started with the process of globalisation but recently there is increasing trend of regionalism in place. Even though technically both lead countries to open up it’s economies for trade there are some important differences between the two which will be identified here.
Market entry of a product is an extremely important concept to consider. There are multiple forms of market entry and deciding which form would work best for the situation could either benefit or harm the company. Exporting and importing is one form of market entry. This can be done either directly or indirectly. The less directly the firm company deals with foreign companies, the less likely they will build their knowledge and experience of how to do foreign business.
Today’s world of rapid increase in and expansion of technology is the reasons for recent International Business growth. The rapid growth in international business makes an understanding of organizational behavior all the more important for contemporary managers. Businesses have expanded internationally to increase their market share, as the domestic markets were too small to sustain growth. Business transactions are also becoming increasing blurred across national boundaries. Companies engage in international business to expand sales, acquire resources, diversify their sources of sales and supplies, and minimize competitive risk.
Globalization offers industries many ways to increase their profits. Since businesses and corporations have access to a wider range of potential clients, they have a chance to increase profits. Global competition also benefits the consumer through lower priced goods. Businesses are able to share information more freely leading to quicker, better innovations in the market place. Easily transferred capital allows businesses and corporations to invest in overseas property to expand their operations.