Globalization is the goal of pursuing opportunities anywhere abroad which all an organization to capitalize on business functions in the countries in which it operates (Pearce & Robinson, 2011, p. 103). It is vital that an organization chose the appropriate timeframe on when and if to advance to a global arena. The following essay will discuss some of the proactive and proactive reasons for going global. To begin with, I believe that a proactive approach exhibited by a firm, makes a statement that do not want to lose their competitiveness. One such reason is capitalizing on economy of scale and growth (Pearce & Robinson, 2011, p. 125). Businesses can lower their cost per unit and spread their cost over more items by selling and producing …show more content…
One reason may be to wait and allow the other competitors to incur the high cost of introducing the product or service (Pearce & Robinson, 2011, p. 119). For instance, Walmart spent approximately $1.1 billion to expand into Mexico. Another reason may be that the customers demand that the suppliers function locally in order to maintain control over them (Opening Profile, 2015). Finally, the regulation and restrictions may be costly in one foreign market, thus another foreign country may be more appropriate. Moreover, tariffs, quotas, or restrictive trade practices may be costly and avoided (Opening Profile, …show more content…
For example, the branches income will be subject to taxes of the country it resides. The branch is an extension and the parent organization and is responsible of meeting the objectives related to customer service and sales. Additionally, the host countries may require that a percentage of the middle and senior leadership team be local citizens and business licenses are time sensitive and must be updated as shifts in business regulations are noted (Pearce & Robinson, 2011, p. 131). Next, equity investments, which are provided by private venture capitalists or firms, are needed to raise money or gain expertise in order to grow the business (Pearce & Robinson, 2011, p. 131). Investors seeking this method only see a return on their investment when they sell their shareholding to other investors or the organization liquidates their assets. In order to make an investment, the venture capitalists will evaluate the firm on the debt to worth ratio (Keythman, 2015). In other words, it a relationship of how much debt will be taken on compared to how much the business is worth as too much debt reduces the value of the owner’s stake. Finally, wholly owned subsidiaries are noted when a company’s stock is 100% owned by another company, whereas a regular subsidiary is 51%-99% owned by a parent company (Schreine, 2015). For
resources are limited, as most of the soil is leached and stony. Neither the soil nor
One of the main costs is to manufacture their products. A major reason the companies are moving manufacturing plants to Asia and South America is to lower manufacturing cost. This will lower the cost for the customer and keep each company competitive and allow them to keep a high margin. Another cost is the inventory cost for each company. Each company needs major capital to store their broad catalog of products. This is especially true for Fastenal because one of their niches is time of delivery. Since Fastenal has more distribution plants we as a company are able to get a customer an order in a shorter period of time. The problem for both companies is since the catalog is so broad many products end up staying in inventory for too long raising inventory costs. Also another cost is product development and management. Each company has many products that need to be developed and the customer seems to always want something else. Both companies spend capital to satisfy their customer’s product needs and each company needs to manage product
Osland, S.J. (2003). Broadening the Debate, the Pros and Cons of Globalization. Journal of Management inquiry, Vol. 12 no. 2, pp.137-154
Porter (1997) suggests in order to gain competitive advantages in the changing business environment, it is essential to design a generic strategy for the business: product differentiation or cost leadership. The competitive strategy is determined at round 2, when recognised our rivals held whole product profile which was the product differentiation strategy. To differentiate our strategy from rivals for competitive advantages, Digby designed to imply the cost
In recent decades, the process of globalization has accelerated and the world economy has become increasingly interdependent. The rise in the number of businesses that extensively operate in more than one foreign country, which is known as multinational corporations, plays an important role in the ongoing procedure of globalization. The United Nations has reported that multinational corporations hold one-third of world’s productive assets and control 70 percent of world trade (Schermerhorn et al., 2014). As there is a considerable growth in international businesses, worldwide economy is becoming more highly competitive. The global economy not only offers great opportunities for multinational enterprises but also on the other hand, creates many difficulties for them. Therefore, success in the large-scale economy requires a number of elements. One of the major determinants is dependent on global managers. In the operation of organizations, managers may encounter different international management challenges that restrict their business development. These challenges often include issues associated with the host countries, the global workforce diversity management, management across cultures, difficulties in competitive global business environment as well as in the process of global planning and controlling. This essay is going to discuss the above international management challenges in a broad sense and giving illustration in aspects of each challenge.
of a firm to attain new forms of competitive advantage (Müller, 2011). It is due to these
Being a global citizen is a concept that I consider for most the foundation upon which I have been building myself as an individual. Given my dual citizenship, Italian, and Croatian, I have always felt the need to represent and embrace both of my homelands in a variety of ways; this has been something I have been, and still am, especially committed to doing. While being a global citizen certainly means traveling and representing your nationality, there is so much more to that. Being a global citizen means being able to completely submerge yourself in a foreign culture, and being able to make that culture your own. The ability to feel at home wherever you find yourself, being enthusiastic and excited to experience a different reality is all
In week five we learn about the importance of globalization and how it can help your company’s profits grow. There are many things to look at when selling globally as different cultures need to be looked at differently when making a marketing strategy. If you understand how to market your products to different cultures in different countries you can take advantage of the profits that can be made through globalization.
International students face many different challenges when studying abroad. This is due to many factors. First they are living in a country very far away from their own. The country they are studying in also has a very different way of life than theirs. Also the laws in foreign country are much different than the laws in their own country. Due to that they face a lot of problems trying to adapt to this new culture. Me personally as an international student in the US studying in ASU have faced three particularly difficult challenges that I was able to overcome through time. In this essay I will explain how international students can overcome tough challenges and situations.
Tallman, S., & Shenkar, O. (2004). International Cooperative Ventures Strategies: Outward Investment and Small Firms from NICs. Management International Review. Vol. 39 (5), 299-315.
In the past, all countries around the world had restricted the movement of people, services, and goods across their borders but today these restrictions have been reduced due to the idea of open economies. These open economies allow for a a higher level of efficiency for businesses to compete with foreign companies which grants the idea of globalization to expand. Globalization is all about deepening the relationship and broadening interdependence among people from different countries. In the business world, globalization creates opportunities (as well as threats) for people, companies, and countries to engage in a number of diverse foreign environments. The cooperation between countries and companies grows through international organizations, treaties, and consultations.
Globalization’s history is extremely diversified and began during the beginning of civilization. Now we live in a world that is constantly evolving, demanding people to use resources in locations that are very difficult to obtain certain resources. This could make it completely impossible to operate in these specific parts of the world. However, globalization allows people across the world to acquire much needed resources. Globalization creates the opportunity for businesses to take advantage and exploit the ability to take part of their business to a different country. Nevertheless, globalization is part of today’s society and will be involved in virtually all situations.
Competitive strategy is the approach that an organisation takes in order to gain advantage over its competitors. According to Porter, there are two major sources of competitive advantages: costs and differentiation. Cost-based competitive advantage involves reducing production costs so that an organisation can earn higher profit margin or offer products at lower price compared to competitors. Differentiation-based competitive advantage involves offering unique properties that are not offered by competitors’ products. Differentiation allows an organisation to charge a premium for their products because they offer additional benefits to buyers.
If there is an increase in the rate of global warming it will have serval effects on us humans and animals in fact the whole environment will be effected by it for example rise in the sea level which will cause lots of marine animals to die due to their loss in their food source or increase in the greenhouse gas concentration which will Increase Earth's average temperature, Reduce ice and snow cover which will cause the polar animals to die because of the change in temperature, as well as permafrost, Increase the acidity of the oceans which will make the water ph unsuitable for the marine life.
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.