international business

international business - 1. Identify and (briefly) discuss...

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1. Identify and (briefly) discuss the 5 major kinds of drivers that are leading international firms to the globalization of their operations. Also (briefly) explain the three environments in which an international company operates. There are five drivers of Globalization: (1)political, (2) technological, (3) market, (4)cost, and (5)competitive. Political - There is a trend toward the unification and socialization of the global community. We can see this through NAFTA and the EU that have several nations into a single markets making significant marketing opportunities. This makes many trading partners. There are two aspects of this trend are contributing to the globalization of business operations: (1) the progressive reduction of barriers to trade and foreign investment by most governments, which is hastening the opening of new markets by international firms that are both exporting to them and building production facilities in them, and (2) the privatization of much of the industry in formerly communist nations and the opening of their economies to global competition. Technological -Advances in computers and communications technology are permitting an increased flow in ideas and information across borders, enabling customers to learn about foreign goods. The internet and network computing enable small companies to compete globally because they make possible the rapid flow of information regardless of the physical location of the buyer and seller. Internet videoconferencing allows sells to demonstrate their products to prospective buyers all over the world without to hold corporate meetings between managers from headquarters and overseas subsidiaries without expensive, time-consuming travel. The ease of obtaining information and market transactions on the internet has started to have a profound effect on many firms and especially on business- to- business commerce. Market - As companies globalize, they also become global customers advertising agencies established offices in foreign markets when their major clients entered those markets to avoid having a competitor steal the accounts. Finding the home market saturated also sends companies into foreign markets. Which means that a vast proportion of most companies’ potential customers are located abroad. Cost - If you globalize product lines to reduce development, production, and inventory costs. The company can also move production or other parts of the company’s value chain to countries where the costs are lower. Dramatic reductions in the cost of generating and transmitting information due to innovations in computing and telecommunications, as well as the decline in transportations costs, have facilitated this trend toward relocating activities worldwide. Competitive
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This note was uploaded on 11/01/2009 for the course ACCT 435 taught by Professor Lowery during the Spring '09 term at Eastern.

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international business - 1. Identify and (briefly) discuss...

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