International business refers to the commercial transactions across nation borders. The different ways international business is being done include trade, foreign direct investment, licensing, franchising and management contracts. Over the last five decades, statistics show that international trade and investment has grown faster than the domestic economies. The globalization in international business will continue to accelerate with the emergence of national economies, advancements in technology, increase in FDI, similarity of needs and wants as driving factors. Considering that 95% of potential customers are outside the US, it is difficult to not embrace today’s global economy. The continuing growth will present opportunities and challenges …show more content…
According to Moore’s Law, which studies that the number of transistors on a chip doubles every 2 years, possibilities with technological advancements are limitless. With “Big Data” and 3D Printing and robotics, companies can target crowd sourcing, similar to the success of Uber, Airbnb, and Task Rabbit. These companies distribute production and services for on demand business without possessing the assets. With the extensive resources and the technological advancements such as cell phones, the Internet, and applications, merely creating a platform can transform into a global business. Since 1970, international merchandise trade grew from $200 billion to more than $18.8 trillion in 2013; exports of services grew from nil to $4.6 trillion in 2013. Furthermore, technology such as 3D printing can be utilized for extensive research and development and “big data” to identify the needs and wants of …show more content…
The recent liberalization of national financial markets, for example of China and India, expands options for companies to accelerate global expansion. Not only are companies expanding, they are also given the opportunities to use resources to the fullest. For example, The Volvo car is made in 38 different nations and states, achieving low production costs, high quality products by simply outsourcing to distribute labor. A strong understanding of the local market will allow companies to target the consumers, meeting their needs effectively and consistently. With this globalization of business, companies can focus on “in the market for the market”. This model allows companies to cut down production and transportation costs, utilizing local resources to create products for the local market.
International business offers access to new customers, economic solutions, and gathering human resources. The growth of international business stimulates competition for companies and nations; one must adjust and take advantage of innovations and productivity to
Many business owners and entrepreneurs are doubtful about the global opportunities available to their business. In other words, business owners don’t give consideration to the world markets, instead they tend think locally in terms of gaining customers. This doubt however is unfounded. The international trade commission reported that 70% of the world’s purchasing power and 95% of the world’s consumers are located outside of the United States, which means that there is a massive market that is currently untapped by 99% of business in America. In addition to doubt, there is the uncertainty about exporting to other countries, this uncertainty may stem from lack of knowledge about foreign trade and the international laws. A business owner may be uncertain about how, when, where, and to whom it is legal to ship their products. Although, this uncertainty is understandable it is not required for businesses that are conducting business legally within the United States, business owners should remain mindful of this so that they can push their uncertainties aside. The last factor that deters businesses from international trade is Fear. Fear that there will be unforeseen and uncontrollable issues with transporting goods such as: theft, loss, damages, diversions, and/or regulatory penalties that may be imposed on the business. Although, there is a
Hill, C., Wee, C. and Udayasankar, K. 2012.International Business:An Asian Perspective. 8th ed. Singapore: McGraw-Hill.
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
15. Hill, Charles W.L. International Business: Competing in the Global Marketplace. New York : McGraw-Hill, 2007.
4. Discuss the forces that are leading international firms to the globalization of their sourcing, production, and marketing.
Daniels, J. D., Radebaugh, L. H., & Sullivan, D. P. (2011). International Business (Environments and Operation. (13ed.). Prentice Hall.
Daniels, J. D., Radebaugh, L. H., and Sullivan, D. P., (2011). International Business: Environments and Operations. Prentice Hall, Upper Saddle River, New Jersey.
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.
As all the countries are on the way to globalize with each other, business is not the exception. Globalization in business definitely brings a lot of great opportunities for many countries. However, in order to make the best of the globalization in business, management is the golden key to that success.
International Marketing, at its simplest level, involves the firm making one or more marketing mix decisions across national boundaries (Jobber, 2010). At its most complex level, it involves the firm establishing manufacturing facilities overseas and coordinating marketing strategies across the globe (Jobber, 2010). There are various reasons for going global, some of which are: to find opportunities beyond saturated domestic markets; to seek expansion beyond small, low growth domestic markets; to meet customers’ expectations; to respond to the competitive forces for example the desire to attack an overseas competitor; to act on cost factor for example to gain economies of scale in order to achieve a balanced growth portfolio. The methods of market entry that could be used are indirect exporting (for example, using domestic –based export agents), direct exporting (for example, foreign –based distributors), licensing, joint venture and direct investment. I found this par...
To complete a Strengths Weaknesses Opportunities Threats (also known as SWOT) analysis presented to a developing country by globalisation, we must first understand the actual concept of globalisation itself. So how can we define this term? Joseph Stiglitz, a winner of the Nobel Prize defines Globalization as “the closer integration of the countries and peoples of the world ...brought about by the enormous reduction of costs of transportation and communication, and the breaking down of artificial barriers to the flows of goods, services, capital, knowledge, and people across borders.” Hence, we can understand that globalisation can be described as an expanding global marketplace for the trading of anything from transport of goods internationally,
Globalisation has been one of the most significant developments of the last half century, and issues such as trade and international commerce have become increasingly important. In consequence, problems such as poverty, unfair wages and poor working conditions in third world countries have been drawn to the attention of consumers (Hayes and Moore, 2007). This is a growing global issue which cannot be ignored by anyone concerned about the problems in developing countries. Free trade and Fair Trade have both been offered as solutions to these issues.
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.
I found this topic so interesting and motivating and I believe that I got some new knowledge and skills after attended this assignment topic. My experience has been successfully expanded as a result of attending classes, to include global approach to the international business. I found out that practice for international business has become little bit complicated due to influence of globalization.
Globalization is a global process that is changing the world. I would also like to discuss what are the benefits and drawbacks of globalization in the world from different perspectives.