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Chapter 3

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Queen's University
COMM 103
Gary Bisonnette

Chapter3The Global MarketplaceOur Changing WorldTodays economic growth rely on US economic capacity and in the next few decades we will see a significant shift in this regard to China India Brazil and other economies that are maturingGrow because of increased FDI foreign direct investmentoverall development of their banking system transportation system business models and operating platformThis will lead to a tremendous growth in these economic regionsimproved standard of livingheighten the desire to buy products and services because of increased personal wealthThe Global MarketOperations becoming increasingly distributed across the globeManages are challenged to maintain control and direction over their organizationsHard to ensure tactics are executed so organizations products and services remain relevantMust ensure operational activities continues to meet increasingly competitive marketplaceWhy Go GlobalNew market opportunitiesoMarkets do mature as domestic markets become saturated organizations will begin to look beyond their current countries and leverage new markets for the products and services which they offerEx Canadian companies have a natural tendency to look to the USoNot oneway focused Fully developed economies are looking to expand to emerging economies Emerging economies are looking to expand to fully developed economiesCostreduction opportunityoOrganizations will locate in and purchase inputs from countries where the cost of productive resources enable them to generate a competitive advantageoAttracted to countries where labor coast are relatively low and occupational skills are relatively highoSince competition is so intense already the ability to truly differentiate a product is become very difficult and price is becoming a weapon of competitive rivalryoOffshoring and outsourcing is becoming very attractivelower labour raw materials energy costs technologybased costs costsoReduced transportation cost associated with producing within the market being servedResource base controloAdd the required resource base necessary to ensure that an adequate future supply exists to support the products and services which they offer in the marketplaceoOrganizations hare interested in acquiring ownership of natural and energy resource basesoAcquisition strategies lies in seeking to control supply sources and influence the supply of such sources as well as being able to generate lower cost or better value by having more control over resource based factors of productionCloseness to market
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