Our Changing World
Although today’s growth continues to rely on significant U.S. economic capacity, the
next few decades will see a significant shift in this regard as China, India, Brazil, and
other economies mature and benefit from the significant foreign direct investment (FDI)
currently underway within these countries, and from the overall development of their
monetary banking systems, intermodal transportation facilities, and competitive business
models and operating platforms.
The Global Market Place
Whether it is through operational growth, strategic alliances, formal partnerships,
mergers, or acquisitions, the global marketplace is becoming home to an increasing
number of businesses seeking to operate via an internationalbased business model.
Why Go Global?
New Market Opportunities
Able to take your company to a new country/city > therefore you are potentially
able to expand
Cost Reduction Opportunity
Organizations will buy resources where it is relatively cheap > Enables
organization to have lower overall costs (manufacturing companies are attracted
to china because of cheap labor)
Offshoring: Transferring a component of a firm’s business system to another
country for the purpose of reducing costs, improving efficiency or effectiveness,
or developing a competitive advantage
Outsourcing: Contracting out a portion of, or a component of a firm’s business
system for the purpose of reducing costs, improving efficiency or effectiveness, or
developing a competitive advantage
Resource Base Control
The key fundamental in resource base acquisition strategies lies in seeking to
control supply sources or influence the use of such sources, as well as being able
to generate lower costs or better value by having more control over resource
based factors of production.
Closeness to Markets
Establishing facilities within developing economic regions enables companies to
operate closer to these emerging markets and to react more quickly to market
opportunities and trends Economies of Scale
Def’n: are reductions in the cost base of an organization as a result of greater size,
process standardization, or enhanced operational efficiencies
The Role of Government: Global Market Instability
Government may have to in
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