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Globalization of business operations in the present era

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Added on  2019-12-03

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MANAGING INTERNATIONAL BUSINESS INTRODUCTION 3 1 Reasons for expanding internationally considering strategic imperatives 3 2 Identifying and analyzing the reason for internationalexpansion, considering environmental imperatives7 CONCLUSION 10 REFERENCES 11 1 INTRODUCTION According to the present era, to ensure success its important for business firms to do not restrict their operations to a particular nation. Therefore, in order to stay competitive and growing company it is important for different organizations to go international.

Globalization of business operations in the present era

   Added on 2019-12-03

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MANAGINGINTERNATIONALBUSINESS1
Globalization of business operations in the present era_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................31 Reasons for expanding internationally considering strategic imperatives................................32 Identifying and analyzing the reason for international expansion, considering environmentalimperatives...................................................................................................................................7CONCLUSION .............................................................................................................................10REFERENCES .............................................................................................................................112
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INTRODUCTIONAccording to the present era, to ensure success its important for business firms to do notrestrict their operations to a particular nation. Globalization has extended new horizons forvarious organizations who can expand their business in different countries around the globe.Basically, globalization is a procedure involving integration of global economy developing fromthe reciprocation of global views, products, thoughts and other elements of culture. The keyadvantage of globalization is that it provide extended markets with better market opportunities.Therefore, in order to stay competitive and growing company it is important for differentorganizations to go international. With this aspect, business enterprises can attain marketleadership and stay competitive (Czinkota and et. al., 2009). In this report, learning will beshown regarding key drivers and forces driving globalization. Further, description will be shownregarding reasons for expanding globally regarding strategic and environmental imperatives. 1 Reasons for expanding internationally considering strategic imperativesOverviewWith the rapid advancement in technology and growing innovation, the world hasbecome a global village. Further, it has become a necessity to go global for attaining marketleadership and stay competitive. The major reason for entering into foreign market is due tolimited scope in domestic market. However, when growth in domestic market is slow it becomesmore crucial for business enterprises to expand their market share. Since, its clear that scope ofdomestic market is limited therefore business enterprise having big dreams should step outsideof the home countries and enter into foreign trade (Alexander, Quinn, and Cairns, 2005 ).Further, for successful implementation of overall growth and development strategy,international business and expansion has become key factor. However, the expansion intoforeign economy requires too much funds therefore this decision should be taken afterconsidering various aspects. Therefore, its important for entrepreneurs intending to expand theirbusiness in international market to research the target market thoroughly. This will help inunderstanding the needs of prospective customers, demand of product and level of competition.This will further help in making appropriate market entry strategy. Thereafter, its also importantfor business enterprise to understand the culture of target company and its impact on business.However, it is important for business to define a budget, according to the cost of entry etc.3
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Further, the business enterprise should allocate the resources and decide the time frame in whichcompany wants to enter the foreign market (Carney, 2005). All these aspects will facilitate theglobal market entry strategy of company.There are various reasons for which companies go international however, the majorground for going international is business growth and expansion. Further, easy availability ofraw materials and human resources as compared to domestic market is also one of the reason forentering the international market. For instance, Royal Dutch Shell a leading oil and gas companyof UK entered the Indian market for cheap labors and easy availability of raw materials etc.Further, the other reason for entering is, Indian government provides subsidies, benefit intaxation etc. that made it more lucrative option for market entry. Hence, the favorablegovernment policies, rules and regulation in some countries is also a factor that facilitateforeign market entry (Barney and Clark, 2007). Thereafter, too much competition in domesticmarket is also a factor that drives UK based companies to go international. For instance, retailsector is facing intense competition due to giant market leaders like, Sainsbury, Tesco, ASDA,Morrison and Walmart. Further, with FDI in retail market in India and some other Asianscountries, Walmart is trying its best to enter the host country. Thereafter, the key reason for entering the global market is to increase the sales byexpanding the market base and enhance profitability. For example, the MAC cosmetics isleading beauty products company of US that entered into UK and other 117 countries forincreasing their cosmetic sales and improving their margin. At present, more than 50% of sales isattained by MAC cosmetics in foreign markets. Likewise, Volkswagen a leading company ofautomobile industry expanded its operations in Germany market to get expand its sales andensure its growth (Doh, 2005). In addition to this aspect, IBM a hardware and technologycompany of US expanded its operations in foreign market to boost its sales and improve itsmargin. Thereafter, improvement in profit is key factor for entering foreign nation. In thisrespect, the Jaguar, UK based company have more than 80% sales in overseas market. Jaguar isalso producing most many of its luxury cars like Land Rover etc in country like Brazil foravailing the benefit of lower federal excise tax, import credits etc. Furthermore, the stability in exchange rate or less fluctuation in currency in particularcountry is a reason due to which a particular country becomes feasible for foreign companies to4
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